Calgary Market Report - October 2023
Calgary Market Summary
Real Estate Rocket Ship: In October, prices rose for the 10th consecutive month, up 19% for Townhomes, 16% for Condos and 12% for Detached/Semis year-over-year, all during the worst real estate market Canada has seen in 30 years!
Sales Jump: Sales were 17% higher than last year and amongst the highest levels ever for October.
Inventory Dilemma: Despite new listings rising to levels not seen since 2015, it's still a "blink and it's gone" situation.
Condos and Townhomes Lead: Consumers continue to seek affordable housing options during this period of high-interest rates, making the affordable options (especially anything under $500,000) very desirable.
“Despite some recent improvements in new listings, supply levels remain challenging in our market. It will take some time to see a shift toward more balanced conditions and ultimately more price stability.”
Ann-Marie Lurie
CREB® Chief Economist
Condo Market
Price Surge Across the City: Condo prices are up 16% YoY and gains were widespread across every district in the city. The most significant price increase were in the lower-priced North East, East, and South East districts - it's like a city-wide treasure hunt for affordable prices!
Record High Sales: October witnessed remarkable sales 47% higher than last year, mostly due to a significant surge in new listings. However, the sales-to-new-listings ratio was very high at 88% meaning nearly all of those new listings are getting sold.
Inventory Decline: Inventory levels dropped 17% from last year, particularly affordable condos and the popularity of condos in Calgary continues to go.
Seller's Market: With months of supply at just 1.5 and the average condo selling in less than a month, conditions continue to favor sellers, propelling the upward spiral of prices. In October, the unadjusted benchmark price hit $316,600, marking a monthly gain of over 1%!
Townhome (Row) Market
Sales vs. Listings Tug-of-War: New listings tried to make their move, but sales were just too high - 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 19% higher than last year.
Lighting Fast: The average townhomes is being snatched up in just 3 weeks! These are peak Toronto housing boom numbers.
Gains Across the Map: Year-over-year price gains have spread across the entire city, from a respectable 12% in the North West to a whopping 29% in the East district.
Detached & Semi-Detached (Duplex) Market
Improved Sales and Listings: Both sales and new listings showed improvement compared to last October. However, with 1,302 new listings and 976 sales, inventory levels shrank this month. These levels mark the lowest ever reported for October.
Not All Houses Are Equal: Inventory levels have dropped for all homes priced below $700,000 and conditions are exceptionally tight for lower-priced homes, creating quite a squeeze in the market. The only area showing looser conditions compared to last year is for homes priced above $1,000,000, with the months-of-supply rising to 4.3 months. It's a tale of two houses —tight quarters for affordable homes and a bit more breathing room for the higher-priced ones.
Price Surge in Detached Market: Persistently tight conditions keep pushing prices higher in the detached housing market. The unadjusted benchmark price as of October hit $697,600, showing a slight increase over last month and a significant 12% jump from last October.
Price Trends Across Districts: Prices trended upwards across every district except the South East over the last month and year-to-date benchmark prices have seen the most significant increase in the North East and East districts, making it a game of price leaps in different parts of the city!
Rental Market
As expected, rents are starting to moderate after rising nearly 40% earlier this year. The median rent for a unit in Calgary (according to Zumper) is now:
1 Bedroom: $1,866/mo (25% increase YoY)
2 Bedroom: $2,168/mo (28% increase YoY)
3 Bedroom: $2,500/mo (16% increase YoY)
Expect rents to be a bit softer until the spring market when things may pick up again. When forecasting future rents, I am using just 5% rental price growth but I personally expect it to be at least 5-8% for the foreseeable future. Record population growth is putting significant pressure on the rental inventory which has not grown significantly in nearly a decade.
Rents tend to be “sticky” and likely will not decrease significantly even when interest rates start to fall.
Final Thoughts
The government is now starting to take some action to limit international immigration (to just 500,000 per year!) but there is still no plan in place to build enough housing to meet this huge demand. Even when interest rates finally do come down, low cost cities will Calgary will continue to benefit from the low cost of living and very affordable housing when compared nationally.
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.