Moderation in Price Growth
Calgary’s housing market, which has been a seller’s paradise for the past two years, is expected to remain strong in the inflationary cycle in the early months of 2024. The rapid increase in prices should slow time with the supply chain slowly improving.
CREB forecasts the benchmark home price, which rose an amazing 6% to $556,975 by 2023. The market sees a much lower growth rate of 6.5% by 2024 (Source 3). This decline in price can be attributed to several factors, including easier inter-provincial migration, improved inventories and potentially weaker labor markets.
Persistent Seller’s Market
Despite the expected downturn, the market is expected to remain strongly supportive of sellers, at least in the summer months. Anne-Marie Lurie, chief economist at CREB, said: “Incremental growth in supply takes time, and retail market conditions will continue into the summer, leading to higher prices in 2024.” (Source 3).
Slowing Interprovincial Migration
A major driver of Calgary’s housing market in recent years has been immigration from other provinces, particularly British Columbia and Ontario. But CREB predicts this migration will slow by 2024, although hardly generating sales activity intensity has continued. (Source 3).
The report suggests that if population growth does not slow as expected, housing supply and inflation problems may take longer to improve. 2023 Calgary’s housing market has seen a decline in new listings, and sharply higher-than-expected prices have led to a decline in home sales (Source 3).
Tight Supply at Lower Price Points
While the higher end of the market is expected to boost supply, conditions remain challenging for cheaper properties, helping prices continue to gain in that segment (Source 3). “I expect that that lower end of the market is still going to be very tight, especially if you’re looking for a detached home,” said Lurie (Source 1).
Labor Market Risks
Another factor that could affect Calgary’s housing market in 2024 is the labor market. The CREB report shows that the economic downturn and environmental legislation could affect investment and job creation in Alberta. This includes emissions caps and a net zero grid by 2030. It in turn can affect the housing market (Source 3).
Outperforming Edmonton
Despite anticipated price restrictions, the Edmonton housing market is still expected to outperform. By 2023, while Calgary’s benchmark price rose 6%, Edmonton’s price dropped about 5% to $368,350 (Source 2). CREB attributes this difference to Calgary’s perceived ability to absorb the bulk of interprovincial migration, supporting sales growth in a high-value market (Source 1).
Conclusion
Overall, Calgary’s housing market is expected to cool somewhat in the early months of 2024. It is still projected to remain a seller’s market with demand outstripping supply. But its value may rise as supply gradually improves and interprovincial migration slows.
Source:
https://calgaryherald.com/business/real-estate/calgary-will-remain-a-sellers-market-in-2024
https://www.cbc.ca/news/canada/calgary/calgary-housing-market-creb-forecast-2024-1.7092143
