Calgary Market Report - August 2023
Calgary Market Summary
Condo Bonanza: In August the condo market went bananas, with record high sales of 2,729 units, due to their relative affordability!
The Plot Twist: Despite record-breaking sales over the past few months, year-to-date sales are still down by 15% compared to last year.
Record Low Inventory: New listings tried to save the day, but inventory levels plummeting to a record low of 3,254 units. Low inventory and high sales are keeping the months of supply low, just over one month.
Rate Roulette: The higher lending rates are the curveball because buyers are either hesitating or going for the more budget-friendly options. But guess what? It's a treasure hunt for supply, especially in the detached market. Inventory levels hit rock bottom in August, and even though new listings are up from last year, sellers are still calling the shots and driving prices up.
Price Party: The benchmark price reached $570,700 in August, that's eight months of consecutive gains! Condos are up 13% YoY and Townhomes are up 16% from last year.
“Continued migration to the province, along with our relative affordability, has supported the stronger demand for housing despite higher lending rates. At the same time, we continue to struggle with supply in the resale, new home and rental markets resulting in further upward pressure on home prices.”
Ann-Marie Lurie
CREB® Chief Economist
Condo Market
August Sales: Not only were sales higher than July, they also outpacing last year's levels and hit an all-time high of 5,582 units YTD, a jaw-dropping 22% higher than last year!
The Hot Commodity: Tight rental markets and affordability have turned the apartment condominium sector into a superstar. Buyers are flocking there like it's a hot new restaurant. But here's the twist: new listings are not keeping up. The sales-to-new-listings ratio is at a whopping 98% in August, squeezing inventories and dropping supply to just one month!
Price Pressure Cooker: Market conditions are so tight they might as well be wearing a corset. This tightness is pushing home prices upwards, and in August, the benchmark price reached $309,100, rising over 1% in a month and a staggering 13% compared to last year - prices are on a rollercoaster with no brakes!
City Centre: Prices in the city center are still below their 2014 highs, presenting significant opportunity - you can in a major city at prices from nearly 10 years ago - that is unheard of!
Townhome (Row) Market
Sales vs. Listings: It's like a high-stakes poker game in the real estate world. New listings tried to make their move, but the sales-to-new-listings ratio remained at a staggering 94% keeping inventory stuck at below one month of supply!
Tight Conditions: Imagine a pressure cooker without a release valve. That's what we're dealing with here — persistently tight conditions squeezing home prices higher. In August, the benchmark price skyrocketed to $413,200, a monthly gain of over 1% and a jaw-dropping 16% higher than last year.
Gains Across the Map: Year-over-year price gains have spread like wildfire across all districts, from a respectable 12% in the North West to a whopping 29% in the East district. It's like a price-gain marathon, and every district is determined to finish strong.
Detached & Semi-Detached (Duplex) Market
Vanishing Act for Affordable Homes: Inventory levels hit rock bottom this month, thanks to the elusive detached homes priced under $700,000.
High-Price Homes Steal the Limelight: On the other side of town, the more expensive homes are having a party and listings are drying up.
August Sales: Detached home sales are feeling left out because of the limited supply in the lower price ranges.
Market Conditions: The market is so tight; it's practically doing yoga poses and this tightness is causing prices to rise like a helium balloon. In August, the benchmark price reached a whopping $696,700, climbing nearly 1% in just a month and over 10% higher than last year.
The Underdog Districts: Making a Comeback are the most affordable districts, North East, East and South East areas - they're not just affordable; they're also winning the race for the highest year-over-year price gains.
Rental Market
Rents are taking a bit of a breather after historic 30%+ increases caused by record housing demand. The number of rental units continues to be incredibly low and a landlord market continues to prevail. The median rent for an apartment in Calgary (according to Zumper) is now:
1 Bedroom: $1,825/mo (22% increase YoY, -1.4% increase MoM)
2 Bedroom: $2,185/mo (27% increase YoY, 1.7% increase MoM)
3 Bedroom: $2,449/mo (27% increase YoY, -2.0% increase MoM)
Rental increases of 30%+ per year are not sustainable and the market will likely soften a bit as things stabilize. However if interest rates stay high, expect rents to continue to go up (more modestly now though) because many people are being kept out of the real estate market because they can’t afford the mortgage at these rates.
Calgary continues to be a very affordable place to buy and rent when compared nationally - with high interest rates, people are flocking to affordable areas and I don’t expect this to change any time soon!
Final Thoughts
Housing affordability is now a national issue and Calgary is the only major city with a growing economy, record population growth, huge numbers of businesses flowing in outside of oil & Gas, and affordable real estate. About 1 in 5 calls I get today are people considering moving to Calgary - this is a trend I see that will continue to grow. Get into the market now or you will be left behind.
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.