Significant Price Increases in Townhomes
In April 2024, the Calgary housing market experienced a spectacular price increase. The average townhome price rose 17.5% year over year to $478,900. This increase highlights the growing affordable housing options in Calgary. Single-family homes also saw a 12.0% increase in value, to $679,500, while condos rose 15.4% to $350,700. These factors highlight a broader shift towards more accessible asset classes amid rising interest rates.
Demand Driven by Affordability and High-Density Living
The Calgary Real Estate Board (CREB) reported a 7.1% rise in home sales in April, driven by demand for high-density affordable units The total number of units sold rose to 2,880 units, and price of the average for all comparable homes rose to $603,700, up 9.9% from a year ago. New listings grew 11.5% year-on-year to 3,491, reflecting the strength of the market. Inventory levels, however, were 16.2% lower than the previous year, indicating a tight supply, particularly for homes priced below $500,000, which saw a 29% decline.
Impact of High Interest Rates and Market Adjustments
Persistently high interest rates have shifted demand towards more affordable housing. This trend has led to increased listings for higher-priced properties, especially those above $700,000. The average number of days homes stayed on the market decreased by 14.4% to 20 days, showing quicker sales turnover. Despite economic challenges, the Canadian Mortgage and Housing Corporation (CMHC) has met its housing goals, redirecting resources from the First-Time Home Buyer Incentive to other housing support tools.
Population Growth and Construction Boom
Calgary’s townhome market benefits from significant population growth and high housing demand. Townhomes offer lower down payments than single-family homes, making them attractive to buyers. The city’s construction sector also saw a record-breaking year in 2023, with 15,393 homes built, an 11% increase from the previous year. The construction of multi-residential homes rose by 49%, and secondary suite development jumped by 43%, indicating a robust response to housing needs.
Zoning Proposals and Future Market Expectations
Calgary’s mayor highlighted the importance of addressing the diminishing housing supply. The city is considering a rezoning proposal to expand residential options, including rowhouses and fourplexes. This proposal is part of Calgary’s housing strategy, aimed at creating a diverse and accessible housing market. But experts warn that supply will take time to catch up with demand because of the challenges of finding enough workers to build houses. Every month, sales volume was up 8.1% in April, with a 10.1% increase in new listings, indicating continued market activity and a sellers’ market.
In conclusion, Calgary’s housing market is experiencing tremendous growth due to the strong demand for affordable housing. The market is showing strong growth due to consistently high prices, brisk sales and strong construction activity. Future changes in zoning and housing policy are expected to further support this trend, providing Calgarians with a more diverse and flexible housing market.
