Calgary Market Report - December 2022
The strong economy in Calgary is the major contributing factor for the strong real estate market there. In Dec 2022, Canada added 104,000 jobs - 25,000 of these jobs (24%) were in Alberta which only has 11.5% of the Canadian population. It’s clear that Alberta has a worker shortage with over 100,000 jobs open; many companies simply can’t find those with specific skills to fill them! This is the #1 reason that the Calgary market is outperforming most other real estate markets in Canada and will continue this trend through 2023 and into 2024.
Housing market conditions have changed significantly throughout the year, as sales activity slowed following steep rate gains throughout the later part of the year. However, Calgary continues to report activity that is better than levels seen before the pandemic and higher than long-term trends for the city.
– CREB® Chief Economist Ann-Marie Lurie.
Overall Calgary Real Estate Market Performance
Sales in 2022 reached a record high of 29,672 units.
Sales levels continued to fall from the peak seen in March with sales down over 70% by the end of December
New listings have fallen by over 81% from the peak which has offset the decline in sales
As of December, there are 2,214 units available, making it the lowest level of inventory reported for December in over a decade.
The Sales to New Listings ratio was 117% meaning that more homes were being sold than listed caused by pent-up demand and the strong economy, these levels are not sustainable
The Benchmark price in Calgary is now $518,800, down slightly from the peak but still nearly 8% higher than last year’s prices.
Condos
Sales in 2022 reached a record high of 6,221 units
Demand for affordable product will continue to be the primary driver for strong sales into 2023 as buyers get priced out of detached and semi-detached properties.
The increase in new listings was not enough to outweigh the sales growth, and inventory levels trended down to levels not seen since 2013
After several years of being oversupplied, the shift to tighter conditions supported annual price gains of nearly 9%.
While prices gained across every district, city-wide prices are still well below the previous highs reached back in 2014
Townhome (Row)
Significant reductions in new listings weighed on sales over the last few months but annual sales still reached a new record high, with 5,153 sales in 2022 and sales were nearly double long-term trends
Higher lending rates are driving more purchasers toward the more affordable townhome options, similar to condos
Inventory levels have fallen with just 1.5 months of inventory currently available, the lowest levels since 2013.
This has ensured that this segment of the market continues to favour the seller
While prices have eased by just over 1% from the June peak, overall year-to-date prices are nearly 15% higher than last year
Detached & Semi-Detached (Duplex)
The Detached and Semi-Detached markets have been the most affected due by raising interest rates
Prices have trended down recently but are still up 14% from this time last year
New listings have increased but mainly in the market’s higher end, supporting more balance conditions, supply of lower-priced homes remains tight and continues to favour the seller
Months of supply currently sits at a very low 1.7 and Sales to New Listings is 125% which will keep upward pressure on prices.
Prices in the detached market have trended down in the second half of the year, as the December benchmark price of $619,600 has eased by just over 4% from the May high
The recent adjustments have not erased all the earlier gains, as benchmark prices reported an annual gain of over 14%
Annual price growth has ranged from a high of 19% in the South East, North and North East districts to a low of nearly eight percent in the City Centre.
Rental Market
Calgary continues to see historic increases in rental costs. The average rent for an apartment in Calgary (according to Zumper) is now:
1 Bedroom: $1,570/mo (37% increase YoY)
2 Bedroom: $1,800/mo (32% increase YoY)
3 Bedroom: $2,300/mo (36% increase YoY)
Key Takeaways
Prices for every property type are still higher than this time last year
Properties under $500,000 are still performing very well and will continue to perform well into 2023 based on challenges to affordability from higher interest rates
Very low inventory levels will keep prices stable but once interest rates start coming back down, expect buyers to return and quick price appreciation due to pent up buyer demand
Calgary is currently facing the perfect storm that will support real estate fundamentals for the foreseeable future:
High oil prices
One of the strongest economics in Canada with over 100,000 job openings
Record provincial migration to Alberta
Record international immigration to Canada
Current levels of rent increases are not sustainable but expect strong gains into the spring and summer markets (I’m thinking high single digits through 2023).
Calgary continues to be my top city in Canada to invest in because of the fundamentals supporting it AND it provides the highest cash flow of any major city (something impossible to find in Vancouver or the GTA today).
Do not expect pre-construction prices to come down, in fact it’s the opposite - higher interest rates have increased building costs and every time a new pre-construction project launches, I am seeing price increases of $5k, $10k or even $20k
The recession Calgary experienced from 2015 to 2020 is now over and they are returning to a boom cycle - as an investor, this is the perfect time to be investing. I have all types of pre-construction properties from condos to townhomes to detached houses that include legal basement rental units that can fit anyone’s budget and investment objects - book a call today and let’s discuss how you can become a Condo Millionaire too!
METRIC DEFINITIONS
Sales = the number of homes recently sold (i.e. Demand). Higher sales tend to increase prices due to high demand resulting from strong economic conditions.
New Listings = the number of homes recently listed for sale (i.e. New Supply). Lower listings tend to increase prices as buyers compete for properties.
Sales to New Listings Ratio: The ratio of sales to new listings entering the market place. Used to existing homes
Inventory = the total number of homes currently available for sale (i.e. Total Supply)
Months of Supply = the number of months it would take to sell all available homes at current sales levels (balance of Supply & Demand). Months of Supply < 4 = Seller’s Market | 4 to 6 = Balanced Market | 6+ = Buyer’s Market
Days on Market (DOM) = the number of days it takes to sell a property from when it was listed. Lower DOM tend to favour Sellers and can indicate competitive marketplaces with scheduled offer dates (i.e. bidding wars).
Benchmark Price = the price of a “typical” home based that controls variables and allows for an “apples to apples” comparison over time.