Calgary Market Report - February 2023
I noticed a SIGNIFICANT uptick in interest for Calgary pre-construction investments starting near the end of January but “the proof is in the pudding” - Hazelwood Condos officially launched February 2 and it has been my best selling Calgary project EVER (and I have worked on over 20 Calgary projects now)! The project featured 4 buildings with 265 units and is now 90% sold out in less than 4 weeks! GTA projects during the pre-construction heyday would be envious of this level of sales - the real estate market in Calgary is picking up steam and investors across Canada are really starting to notice.
And the good news for the city of Calgary continues:
Mar 2: Calgary housing inventory sinks to lowest levels since 2006 (Financial Post)
Mar 1: Calgary House Prices Rise For 2nd Straight Month to Start 2023 (Daily Hive)
Feb 22: Alberta Sets Another Record for Venture Capital Funding (Calgary Herald)
Feb 9: Tech Sector Perceptions of Calgary Improving (Global News)
Overall Calgary Real Estate Market Performance
Sales, new listings and inventory levels in February all trended up compared to January, as expected with typical seasonality
Sales and New Listings declined over last year’s record high for February and remained stronger than long-term trends
New Listings have fallen below long-term trends and the high Sales/New Listings ratio means supply is decreasing
Just 1.6 Month’s of Supply available for the entire Calgary market is putting upward pressure on prices, especially on properties <$500k
The number of homes available for sale (i.e. Inventory) is currently at it’s lowest level since 2006
“While higher lending rates are impacting sales activity as expected, we are seeing a stronger pullback in new listings, keeping supply levels low and supporting some stronger-than-expected monthly price gains, prices are still below the May 2022 peak and it is still early in the year. However, if we do not see a shift in supply, we could see further upward pressure on prices over the near term.”
– Ann-Marie Lurie, CREB® Chief Economist
Condos
Condo Sales and New Listings are just below historic levels seen during 2022
inventory remains low compared to levels seen over the past eight years
Months of supply dropped to just 1.8 months - incredibly low!
Days on Market is just 36 and will likely trend lower into the spring market
Tight market conditions and record immigration are putting upward pressure on prices
Benchmark Price reached $286,000, a 4.1% gain year-to-date and over 11% higher than last February!!
Condo prices still remain nearly 7% below the peak reported back in 2014
Townhome (Row)
Conditions remained exceptionally tight in February with only 1.0 Months of Supply and a sales-to-new listings ratio of 87% - this is INCREDIBLE!
Sales remain strong for February as demand shifts toward the affordable product in the market
Persistently tight conditions caused further upward pressure on prices
Benchmark Prices reached $369,700, a gain of 3.2% YTD and 9.1% since last February
Unlike the other market sectors, prices reached a new high this month
Detached & Semi-Detached (Duplex)
Sales and New Listings reported significant year-over-year declines over last year’s record high
Inventory nudged up but levels are still amongst the lowest ever seen in February
Months of supply fell to 1.6 for Detached and 1.8 for Semis
Benchmark Prices rose over last month’s levels to $635,900
Supply continues to remain a challenge relative to demand for lower-priced homes, and conditions are shifting into balanced territory for homes priced above $700,000
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: $1,661/mo (41% increase YoY)
2 Bedroom: $1,947/mo (40% increase YoY)
3 Bedroom: $2,300/mo (32% increase YoY)
These level of increases are not sustainable and they will eventually moderate but I expect increases between 5-10% for the foreseeable future. Keep in mind there is no rent control in Calgary!
Final Thoughts
Calgary is bucking the real estate trend and is virtually the ONLY market in Canada where you can buy a pre-construction property that will cash flow from day 1 with 20% down (I have some that will cash flow over $600/mo @ 5% mortgage interest!!). I see Calgary today where the Toronto was just 20 years ago - you could buy condos for around $200k and there was lots of land in the GTA for expansion. Those days are long gone in Toronto but this is the opportunity to capitalize in Calgary. If you invest in Calgary today, 20 years from now I think you will be laughing at the life altering decision you decided to make.
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.