Calgary Market Report - January 2023
At the end of January and in early February, I have noticed a significant uptick in interest for pre-construction properties in Calgary. It’s no longer the “affordable” condos investors are chasing but I am getting inquiries on everything from luxury buildings, townhomes, semis, detached, legal basement units - things are really starting to pick up!
And I’m not surprised, look at just a few of the Calgary headlines that have come out in just the last 2 weeks:
Feb 15: Calgary Rent prices take one of the biggest jumps in Canada
Feb 7: More Business Leaders & Employees in Tech See Calgary as a City of Opportunity
Feb 2: Feasibility Study Demonstrates Calgary Region’s Potential As A Major Hydrogen Hub
Feb 1: Calgary Downtown Vacancies Drop to 27% ← this is actually great news!
Jan 24: Global Investment Growth strengthens Alberta’s economy and communities
Jan 18: Calgary Rises to 8th Best City to Live & Work as A Moviemaker
Calgary’s is having a moment. Get on board or you might miss out.
Overall Calgary Real Estate Market Performance
The number of New Listings in January fell to the lowest levels seen since the late 90s.
The number of New Listings fell in nearly every price range, but there was more activity for lower-priced properties
There are 43% few properties available for sale than long-term trends for January with 30% declines for properties priced under $500,000
Conditions are not as tight as last year, but lower inventory levels are preventing a shift toward balanced conditions
Sales activity has dropped significantly but is now consistent with long-term trends.
The mix of Sales has changed; condos now represent a much greater portion of sales while the portion of detached homes sold has gone down
Prices trended up slightly in January, supported by condos and units under $500,000
The Benchmark Price in Calgary reached $520,900, 5% higher than last January, but still well below the May 2022 high of $546,000 dragged down by the higher priced detached market.
“Higher lending rates are causing many buyers to seek out lower-priced products in our market, however, the higher rates are likely also preventing some move-up activity in the market impacting supply growth for lower-priced homes. This is causing differing conditions in the housing market based on price range.”
– Ann-Marie Lurie, CREB® Chief Economist
Condos
Condo Sales decreased by 10% YoY but did not see the same rate of decline as other property types in January, partly due to the level of new listings coming onto the market
The number of units available for sale remained well below long-term trends for the month and have not been this low in January since 2014
Just 2.4 Months of Supply is available and the average number it takes to sell a property decreased 37% to 44 days
A general shift to affordable options by buyers is benefiting the Condo market the most, especially in North East and East Calgary
Benchmark Condo prices rose 1% YoY from January to reach $277,600, up nearly 10% YoY but still below the record high prices set in 2014
Townhome (Row)
Townhome sales slowed over last year’s record high but remained well above long-term trends for the month (Sales would have likely been stronger if more listings came onto the market)
In January, new listings dropped 25% from the previous year and were 20% below long-term trends
The number of towns available for sale dropped 26% YoY and Months of Supply sits at just 1.5 months (deeply Seller Market territory)
Persistently tight conditions caused prices to rise nearly 1% over December
Benchmark Townhome prices are now $361,400, up 12% YoY!
Detached & Semi-Detached (Duplex)
Detached Sales saw the largest decline despite the year-over-year rise in inventory levels, mainly due to a limited supply of lower-priced products
Sales of Semis slowed relative to last year’s levels but remained above levels achieved before the pandemic
A significant decrease in the number of new listings will keep sales levels low until more houses start to be listed
The total number of units available for sales represents about 2 months of supply, very low by historic standards
Price growth was uneven across Calgary with most districted realizing monthly price growth with the higher-priced City Centre district lagging behind.
Benchmark Price reached $622,800 for Detached and $559,200 for Semis in January, up about 6% since last January.
Rental Market
Record net migration and strong international immigration are putting pressures on rental inventory and Calgary continues to see historic increases in rental costs. The average rent for an apartment in Calgary (according to Zumper) is now:
1 Bedroom: $1,610/mo (37% increase YoY)
2 Bedroom: $1,840/mo (34% increase YoY)
3 Bedroom: $2,271/mo (33% increase YoY)
If this trend even moderately continues, it will be well worth it to opt-out of just about every Rental Guarantee offered by developers at closing.
Final Thoughts
Calgary continues to be one of the best performing real estate markets in Canada, still up 5% overall YoY and 10% YoY for Condos! I am consistently seeing price increases as new pre-construction projects launch. It might only be $10k each time a new project launches but when there is a new launch every month - that starts to add up QUICKLY.
If you are interested in investing, please get in touch - 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.