Across some of the hottest housing markets in Canada, sales activity appears to be moderating substantially as the impact of recent interest rate hikes takes hold. In Calgary, though, the city appears to be weathering the impact of that cooldown with little ado. While sales slowed compared to the beginning of the year, the Calgary Real Estate Board (CREB) said that year-over-year sales had increased by about 6%, with that organization’s chief economist Ann-Marie Lurie describing sales figures as “exceptionally strong.”
Even more, Calgary’s lag in housing development makes the city stand out to investors looking for a market with unappreciated growth potential. Beyond just affordable home prices, the strong oil and gas market and an increasingly diversifying local economy are making the future look bright for the city.
“Demand is quite strong here, and I think it’s going to continue to grow, because the big shift that I’m seeing is a lot of people moving out from places like the Greater Toronto Area (GTA) and Greater Vancouver Area (GVA) and coming here to Alberta,” said Kim Nguyen, a Calgary-based regional team lead and mortgage associate with Vine Group.
Combine that with the average house price in Calgary being multiple times lower than the eye watering figures posted in the likes of Toronto and Vancouver, that affordability is drumming up further interest from outside buyers in Calgary’s market, as well as impelling Albertans to move swiftly to secure a purchase as competition increases. While the benchmark price in Calgary rose 17% annually – and 2% month-over-month – it still stood at just $526,700 in March, compared with an average of around $1.3 million in Toronto and just under $1.4 million in Vancouver.
However, this doesn’t mean that Calgary hasn’t felt some of the pressure from a receding market. Price growth has slowed relative to last year and this year’s rapid pace, with CREB predicting further balancing as interest rates rise, though they imply a move towards a balanced market rather than full-on correction.
“As expected, higher interest rates are starting to have an impact on home sales. This is helping shift the market toward more balanced conditions and taking some of the pressure off prices,” said CREB® Chief Economist Ann-Marie Lurie in their monthly report.
Into the future
Calgary appears poised to stand a great chance at weathering turbulence in the housing market and may only increase in appeal in coming years. A strong real estate market combined with an equally strong and diversifying economy makes Calgary a strong choice for both investors and the first time home buyers alike. With investors and buyers hedging their bets in Calgary’s housing market due to the affordability and potential in the future, it's looking promising for Calgary, yet in this turbulent market, only time will tell.
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