Calgary Market Report - May 2024
Market Summary
Calgary is Unbeatable Today: The Calgary market continues to be on fire with historically high sales, low inventory, and surging prices. The story couldn’t be any more different when you look at the GTA with record low sales, record high inventory and falling prices - where do you want to be investing your money?
Resilient Market: May saw 3,092 resale home sales, which dipped 1% below last year’s record but remained 34% higher than long-term trends for the month, primarily due to limited supply of lower-priced detached and semi-detached homes.
New listings Up: In May 4,333 units were listed, almost 19% higher than last year but despite this, inventory levels remained nearly half what we typically see in May, with most gains driven by homes priced above $700,000.
Still A Heavy Seller’s Market: Conditions continue to favour sellers with 1 month of supply available cross the entire Calgary market (this is INCREDIBLY low). Several districts continue to report less than one month of supply and these market conditions continue to drive price growth across all districts in the city.
Price Growth Continues : The unadjusted total residential benchmark price in May reached $605,300, nearly 1% higher than last month and 10% higher than last May.
“Although new listings have increased, much of this growth is in higher price ranges for each property type. Our strong economic situation has supported sales growth in these higher price ranges. However, this month's sales could not offset the declines in the lower price ranges due to a lack of supply choice."
Ann-Marie Lurie
CREB® Chief Economist
Calgary Condo Market
Rising Demand: Affordability is driving growth in condo sales becuase townhomes and houses are simply too expensive for many people in Calgary now.
Record High Sales: Condo sales were a YTD record high, up 19% over last year.
Stable Inventory: Inventory levels remained stable overall but higher-priced homes are offsetting declines in lower-priced ones.
Seller's Market: With just over one month of supply, conditions heavily favor sellers.
Prices in Affordable Districts Surge: Year-over-year price gains exceed 30% in North East and East areas and the City Centre was the “slowest” with a stellar 13% YoY gain.
Calgary Townhome (Row) Market
Sales Surge: May reported 540 sales, a 16% YTD increase.
Inventory Shift: A rise in new listings supports overall inventory gains but listings for townhomes below $400,000 have dropped while inventory of higher-priced row houses is continuing to build - again telling the affordability story.
Strong Seller's Market: Sales-to-new-listings ratio was at 78% with less than one month of supply.
Significant Yearly Price Growth: Benchmark price in May hit $462,500, nearly 2% higher than last month and an incredible 19% higher than last year.
Calgary Detached & Semi-Detached (Duplex) Market
Market Dips: The detached and semi-detached housing market faced a substantial nearly 20% decline in annual sales, with limited choices in lower price ranges leading to a shift in consumer preferences.
Detached Sales Decline: Year-over-year sales dropped by 7%, despite gains for homes priced over $700,000.
New Listings Increase: Rise in new listings caused the sales-to-new-listings ratio to drop to 68%, boosting inventory growth.
Low-Price Inventory Drop: Inventory for homes priced below $600,000 fell, making up only 13% of the detached market.
Seller's Market: With just over one month of supply, conditions favor sellers, driving prices up.
Rising Prices: Unadjusted benchmark price in May reached $761,800, over 1% higher than last month and 13% higher than last year.
District Gains: Most affordable districts saw the highest year-over-year price increases.
Calgary Rental Market
Rents have started to plateau and there is exhaustion on the marketplace. This is no surprise as rents have increased over 60% in the last 3 years. Record population growth will continue to put upward pressure on the rental inventory which is not keeping up with demand but expect increases from here to be more moderate.
The median rent for a unit in Calgary (according to Zumper) is now:
1 Bedroom: $1,839/mo (4% increase YoY)
2 Bedroom: $2,197/mo (9% increase YoY)
3 Bedroom: $2,500/mo (0% increase YoY)
My Final Thoughts
The recent interest rate cut will have no material impact on the market in Canada or Calgary because affordability continues to be the biggest issue in Canada, and Calgary is not immune from it. Any properties priced on the lower end will continue to perform the best until interest rates come down materially (I’m talking 2-3% in cuts). At this point, people will be able to afford to upgrade their current properties - people in townhomes can buy a semi or detached house, condo buyers can buy a townhome or house, and first-time buyers can afford a condo.
Calgary continues to experience record growth because all of Ontario and BC are simply too expensive for people to live and they are looking at other opportunities. Everyone nowadays seems to know someone that has moved to Calgary and I think this trend will continue for the forseeable future. This will continue to put pressure on the housing supply and I expect prices will continue to go up but likely a bit slower though than the last 2-3 years.
If you are interested in investing, please get in touch - I have all types of pre-construction properties that can take advantage of today’s market conditions - book a call today and let’s discuss how you can become a Condo Millionaire too!
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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. Supply). Lower listings tend to increase prices as buyers compete for fewer 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 that controls variables and allows for an “apples to apples” comparison over time.