Calgary Market Report - June 2023
Calgary Market Summary
The Calgary residential real estate market continues to set records with a new condo record of 3,146 sales in June, showing very strong demand continuing for housing in the city. Although year-to-date sales are currently 23% lower than last year, they remain significantly higher than pre-pandemic levels, indicating the resilience and recovery of Calgary's housing market, especially in the face of rising interest rates.
Notably, there has been a positive trend in new listings, providing relief and a monthly increase in inventory levels. However, despite these improvements, the inventory for June stood at 3,458 units, marking a decline of over 36% from last year and reaching the lowest inventory levels for June in nearly two decades.
With a supply of just over one month, the current market conditions continue to favor sellers, placing upward pressure on home prices. In June, the total residential benchmark price reached $564,700, representing a monthly unadjusted gain of 1%.
Now, let's dive into some specifics:
TOWNHOMES (Row Houses): Both sales and new listings trended up compared to the previous month. However, with a sales-to-new-listings ratio of 86% and inventory levels below one month, conditions continue to favor sellers, resulting in upward pressure on home prices. In June, the benchmark price reached $400,000, over 2% higher than last month and more than 11% higher than last year. Prices have improved across all districts in the city, with the most significant monthly gains occurring in the East, North East, and South districts with price gains of 20%!
CONDOS: Sales in June reached 857 units, a substantial 48% increase compared to last year. Over the past three months, sales growth has led to an 11% rise in year-to-date sales compared to last year. This growth in sales was possible thanks to improving new listings. However, persistently strong demand for affordable properties has prevented significant improvements in inventories. In June, inventory levels reached 1,116 units, the lowest reported for the month since June 2013.
Persistently tight market conditions have contributed to the sixth consecutive month of price increases. As of June, the benchmark price for condos reached $303,200, nearly 2% higher than last month and an impressive 12% higher than last year and some areas still remain below the last high from 2014.
The demand for housing remains robust, bolstered by a healthy labour market and increased migration levels, which helps offset the impact of higher lending rates. Although we have seen some recent improvements in new listings, particularly for apartment condominiums, it is not enough to cause any substantial change from the low inventory situation in our city. While new home starts are on the rise, it will take time to observe their impact on supply.
Ann-Marie Lurie
CREB® Chief Economist
Condo Market
Sales in May reached 857 units, 48% higher than last year and YTD sales are now 11% higher than last year
Listings were the highest in 3 years but persistently strong demand for affordable product has prevented inventories from growing
Inventory levels reached 1,116 units - just over 1 month of supply and the lowest level for the month since June 2013!
The benchmark price reached $303,200, nearly 2% higher than last month and 12% higher than last year
While overall prices have hit a new record high, prices still remain below the peak from 2014 in the City Centre, North East and East districts.
Townhome (Row) Market
Sales trended up since last month but kept stable compared to new listings so inventory remained constant
Sales-to-new-listings ratio of 86% and towns selling in 19 days on average but this heavily into a seller’s market
With just 0.8 months (24 days) of inventory available, townhomes are the tightest market segment in Calgary
Until sales slow down or inventory skyrockets (unlikely), there will continue to be upward pressure on home prices.
The benchmark price reached $400,000, over 2% higher than last month and over 11% higher than last yearPrices improved across the entire city, with the most significant monthly gains occurring in the East, North East and South districts, reported nearly 20% growth YoY.
Detached & Semi-Detached (Duplex) Market
Sales continued to trend up but new listings could not keep pace, dropping from last month
With only 1,651 units available, inventory levels hit a new record low for June!
Inventories declined across most price ranges, but the steepest declines occurred in homes priced below $600,000 (representing 24% of the market, a significant drop from last year, where that market segment represented 45% of the supply)
Months of supply sits at just 1.1 and Days on Market is averaging 20 - this is a very tight market!
Limited inventory, especially in affordable price ranges, ensured that the market continued to favour the seller, driving price increases
The benchmark price reached $685,100, a 2% month-over-month gain and 6% increase from last year.
Year-over-year gains were the highest in the most affordable North East and East districts.
Rental Market
Record population growth continues to put pressure on the housing stock in Calgary. The median rent for an apartment in Calgary (according to Zumper) is now:
1 Bedroom: $1,765mo (34% increase YoY, -0.6% increase MoM)
2 Bedroom: $2,008/mo (30% increase YoY, 2.1% increase MoM)
3 Bedroom: $2,489/mo (42% increase YoY, 1.6% increase MoM)
The increases in rent over the last year are not sustainable so expect them to moderate over the rest of 2023. However tight market conditions, record population growth, and high interest rates will keep many people from buying homes so expect rental prices to continue to go up (just at much more moderate pace).
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
Calgary’s comeback continues! It’s not just investors flocking to Calgary but people looking for affordable areas to live. With a strong economy and many remote work options now available, why would people (especially newcomers) settle in a high-cost area when they can make the same amount of money, be taxes less, and have a much higher qualify of living at a much lower cost? It’s a no brainer to me!
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.