While low inventory and rising mortgage rates are impacting markets in several of Canada’s largest cities, Calgary is off to a fast-paced start to what will likely be one of the busiest spring markets we have seen in the province over the past decade.
Steve Phillips, broker at CIR Realty, says the company has already seen its second-highest transaction count in February over its 40 years in business.
Even with lower inventory levels, the buyer market is strong and increasingly competitive.
“Over the past decade, we are seeing the third-best start to the year for sales in Alberta through the first two months. Due to the lack of inventory, homes are once again earning competitive multiple offer situations if they have a compelling price,” says Phillips.
In the first two months of 2023, the province has already seen a 27 per cent increase in sales over the 10-year average.
“With how fast things are happening, and for clients to capitalize on the market, it is very important for buyers and sellers to be educated specific to the markets they are interested in,” he says.
Many people assume that rising interest rates would have had a stronger impact on the number of buyers looking to qualify for a mortgage. Ryan Iannone, a mortgage broker in Calgary with Mortgage Connection, says this has not been the case.
“After the initial shock of interest rate increases last year, buyers are back and getting pre-approved in very high numbers. I would say we are as busy as we have ever been with preapprovals right now, which is a big change from the fall,” says Iannone.
“At the end of 2022, most active buyers were shopping in the condo market. We are now seeing an active market in all segments, from apartment-style condos to million-dollar-plus homes.”
There has also been a shift in mortgage terms that people are taking. Instead of consumers going with the standard five-year fixed or variable rate mortgage, many people still want the security of a fixed rate but not the length of the standard five-year.
This has meant a big uptick in three-year fixed mortgages across the entire industry, according to Iannone.
“The consumer seems to be looking for the security of a fixed mortgage but doesn’t want to lock in for too long as they believe rates will come down,” Iannone says.
In February, Calgary was one of the few markets to see an increase in price year-over-year; the unadjusted benchmark price increased by nearly two per cent over January levels and last year’s prices, according to the Calgary Real Estate Board.
Kirsten Smith is the marketing and relocation director at CIR Realty, headquartered in Calgary, Alberta.