Calgary Market Report - May 2023
May was a month of triumph for real estate investors! Sales across the city skyrocketed, hitting a jaw-dropping 3,120 sales, breaking all previous records for the month. It seems like the market is finally bouncing back from its early year blues. But wait, there's more! The supply of new listings is dwindling faster than ice cream on a hot summer day, causing inventory levels to drop. With a sales-to-new-listings ratio of 85%, it's safe to say that sellers are having a field day, driving those home prices up like a rocket on a sugar rush.
In May, the unadjusted benchmark price soared to a whopping $557,000, more than 1% higher than last month and 7.4% higher year-to-date.
Calgary’s housing market continues to exceed expectations with the recent gain in sales activity this month. The higher interest rate environment and recent rental rate gains have driven more consumers to seek apartment condominium units. In addition, the recent rise in new apartment listings has provided enough options to support the sales gain. Calgary continues to benefit from the relatively healthy job market and recent population growth keeping housing demand strong across all property types.”
Ann-Marie Lurie
CREB® Chief Economist
Condo Market
Sales in May reached 858 units, marking a year-over-year gain of 36% and setting a new record high for year-to-date sales, which increased by 4%.
The increase in sales was made possible by recent gains in new listings, with 1,025 new listings in May, representing an 8% year-over-year gain.
Despite the rise in new listings, the high sales-to-new listings ratio of 84% prevented significant shifts in inventory levels.
Inventory levels remained 23% lower than in May 2022, keeping the months of supply at just over one month.
Persistently tight market conditions led to further price gains, with the unadjusted benchmark price reaching $298,600 in May, a monthly increase of over 1% and a year-over-year gain of nearly 11%.
Apartment condominium prices have finally returned to 2014 levels, thanks to recent growth.
Not all districts reported new record high prices, with the North, North West, West, and South East districts being the only areas to achieve full recovery.
Year-over-year price growth ranged from a high of 16% in the North District to a low of 10% in the City Centre.
Townhome (Row) Market
New listings in May showed improvement compared to earlier in the year.
Despite the increase in new listings, the high sales-to-new listings ratio of 89% maintained the low inventory situation.
Sales activity is lower than last year, primarily due to the lack of supply in the market segment.
Inventory levels have dropped by 50% compared to the previous year.
With less than one month of supply available, prices continue to rise.
In May, the benchmark price reached $390,500, marking a 2% gain from the previous month and nearly nine percent higher than last year's peak price.
Row prices experienced increases across all districts.
Year-over-year price gains exceeded 15% in the North East, South, and East districts.
The City Centre, North West, and South East districts saw slower price gains, but still at rates over 7%.
Detached & Semi-Detached (Duplex) Market
May sales reached 1,486, showing an 8% decline compared to the previous year.
Sales for homes priced above $600,000 rose, but lower price ranges experienced declines.
New listings continue to decrease for homes priced below $700,000, limiting choices for buyers seeking lower-priced detached homes.
Higher-priced properties saw improved new listings, but strong demand maintained tight market conditions across all price ranges.
The detached benchmark price in May reached $674,000, marking a nearly 2% increase from the previous month and over 4% higher than last year's peak price.
Each district reported a new record high price, with year-over-year gains ranging from 12% in the East District to 2% in the City Centre.
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: $1,775mo (34% increase YoY, 2.2% increase MoM)
2 Bedroom: $1,966/mo (26% increase YoY, 1.4% increase MoM)
3 Bedroom: $2,450/mo (28% increase YoY, 7.1% increase MoM)
Rents will continue to go up as Calgary experiences record population growth and high interest rates keep many potential buyers out of the market.
Final Thoughts
It looks like the Calgary market is firing on all cylinders. I have had clients watching the Calgary market for over a year now and have already missed significant gains. Time and time again it has been proven that you cannot time a market and you are always better off investing today than trying to find the perfect entry point. Now is the time to jump on this price rollercoaster while it's climbing!
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.