Calgary’s real estate market saw a decline of 43 per cent in sales activity in the first quarter (Q1) of 2023, compared to the all-time record-high performance in the same period last year, according to the Calgary Real Estate Board’s (CREB) Q1 housing market report.
CREB notes this steeper decline was expected, given the surge in sales last year, as purchasers were eager to enter the market ahead of expected rate gains.
“While no further rate gains have occurred so far this year, the higher lending rates and limited supply options are contributing to some of the pullbacks in sales,” said CREB Chief Economist Ann-Marie Lurie.
Lurie notes that sales activity has remained well above pre-pandemic levels, thanks to recent migration gains and a stronger employment market.
CREB reports the most notable challenge in the market has been related to supply levels, which have declined at a pace exceeding expectations.
New listings in the first quarter declined by 40 per cent, preventing any significant shift in supply levels given the relatively strong sales.
Inventory levels in the city averaged 2,814 units in the first quarter, 21 per cent lower than last year’s levels and over 42 per cent below long-term Q1 trends. With a sales-to-new-listings ratio of 71 per cent and a months of supply of under two months, conditions continue to favour the seller.
Exceptionally tight market conditions early last year drove significant price gains throughout the 2022 spring market, peaking at $544,733 in Q2. While supply-demand balances remained tight throughout 2022, prices did trend down over the third and fourth quarters, somewhat adjusting for the rapid rise earlier in the year.
Further tightening in the supply-demand balance in the first quarter was enough to stop the downward price trend. The quarterly benchmark price rose by nearly 2.0 per cent over the fourth quarter to $531,200, but remained below the Q2 high.
According to Lurie, some fluctuations in price were expected this year, given what happened last year.
She adds, “However, price growth to date has been stronger than expected. Given the limited supply currently on the market, we could expect to see some stronger price growth through spring, potentially supporting a modest annual gain in 2023.”
