Rising Home Prices and Sales Growth
Calgary’s Housing market has experienced potential growth in April 2024. This was indicating a strong sellers’ market. Home prices was also increased by 9.9% year over year to $587,300. Single-family homes were up 12.0%, to $679,500, and townhomes/multiplexes were up 17.5% to $478,900. Condo prices also surged by 15.4% to $350,700. The total number of homes sold in April was 2,880, marking a 7.1% increase from the previous year. The benchmark price for all home types stood at $603,700, up 9.9% year-over-year and 1% from March.
High-Density Property Demand
The Calgary Real Estate Board (CREB) reported a 7.1% surge in home sales, primarily driven by demand for more affordable, high-density properties. New listings in April increased by 11.5% year-over-year to 3,491. Despite the influx of new listings, inventory levels were 16.2% lower than the previous year, at 2,711 units, which is only half of what is typically observed in April. This tight supply, especially for homes priced below $500,000, has fuelled the competitive market.
Impact of High Interest Rates
Persistently high interest rates have shifted buyer demand towards more affordable properties. This trend has resulted in increased listings for higher-priced properties, particularly those above $700,000. Meanwhile, the supply of homes priced below $500,000 has significantly declined by 29%. Homes are selling faster, with an average of 20 days on the market, a 14.4% decrease from the previous year. Despite economic challenges, the Canadian Mortgage and Housing Corporation (CMHC) has redirected funding to support the housing market, discontinuing the First-Time Home Buyer Incentive.
Townhome Market Expansion
Calgary’s town home market is thriving due to population growth and high housing demand. Town homes offer lower down payments compared to single-family homes, making them attractive to buyers. The average price of town homes increased by 17% to $458,100 compared to the previous year. Similarly, Edmonton experienced a 10.3% rise in townhome prices, reaching $245,900. Despite this growth, the supply of townhomes is decreasing as lower-priced homes are taken off the market, further tightening the sellers’ market.
Future Market Expectations
Calgary’s mayor emphasized the need to address the housing decline, prompting proposals to rezone the entire city. Part of the Calgary Housing Strategy, the proposal aims to add a wider range of housing options, such as row houses and quads by 2023. Calgary saw a record year of housing, with 15,393 homes built, last year, an increase of 11% over expectations. Mass home construction was up 49%, and secondary suite development was up 43%. Experts warn, however, that it will take time for supply to meet demand, given the challenges of finding qualified workers. The sales-to-new-listings ratio (SNLR) in April was 83%, indicating a strong sellers’ market, although slightly down from the previous month.
In summary, Calgary’s real estate market is experiencing robust growth, driven by high demand for affordable, high-density properties. Rising prices, faster sales, and significant construction activity characterize the market. Future zoning changes and strategic housing policies are expected to support this trend, ensuring a dynamic and competitive housing market for Calgary residents.
