What's Going On with Real Estate in Calgary in 2024?
Calgary’s real estate market is on the rise, with soaring home prices and high demand. Discover key market trends, economic influences, and forecasts to help you navigate and succeed in this dynamic housing landscape.
Key Takeaways
- Rising Prices : Calgary home prices have surged over the past year, with detached homes averaging $805k.
- Market Shift : Buyers are moving toward condos and townhomes due to affordability challenges in the detached home market.
- Economic Impact : Interest rates and housing supply constraints are driving market changes.
- 2024 Forecast : Expect continued price growth as interest rates drop and supply struggles to meet demand.
In terms of Canadian real estate markets, Toronto and Vancouver seem to dominate the news cycle with their rising costs, and growing supply constraints. However, Calgary is a market that should not be overlooked. Although less expensive than Toronto or Vancouver, the average home price in Calgary has been rapidly increasing over the past couple of years. In this guide, we will cover our Calgary housing market forecast for 2024, alongside our Alberta real estate market forecast, to best equip you with the knowledge you need to navigate the current market landscape.
Current Trends in Calgary's Real Estate Market
Calgary house prices have climbed significantly over the last 10 years, but are now stabilizing at an all-time high. Since August of last year, home prices have increased by about 16.6%, with average home prices currently sitting at $805k for detached, and $658k for semi-detached homes. The average apartment in Calgary is currently selling for ~$350k, having increased in price by 14.1% over the past year. For context, average weekly earnings in Calgary have only increased by 4% since August of last year, further widening the affordability gap.
Given these rapidly rising prices, it is no surprise that monthly home sales have declined 20% over the past year. More interestingly, Calgarians have been overwhelmingly shifting away from detached homes, with most homes sales coming from the condo and town home segments. One factor that could be driving this trend is the understatement of the inflation figures. While the data tells us that the average detached home sold at $805k, for instance, that average could be reflecting a much lower quality of home than an “average detached home” as buyers may only be buying the lower priced options. This “average” may in fact be representing small, old homes, without basements, with small backyards, and no sidewalk. A “typical” detached home may in fact cost over a million dollars. As such, homebuyers may prefer a very nice townhome over a “fixer upper” semi-detatched home.
Will housing prices drop in Calgary in 2024?
It's unlikely that Calgary home prices will drop in 2024 due to expected interest rate cuts and the ongoing supply-demand imbalance. A price decline may only occur if the current market dynamics significantly shift in the latter half of 2025.
Economic Factors Impacting the Market
The most significant factor driving change in the Canadian real estate market is the rise and fall of interest rates — especially in recent years. Although the Bank of Canada tanked interest rates during the COVID-19 pandemic, they consistently hiked rates throughout 2022 and 2023 to try and offset growing inflation.
Generally, these rate hikes worked to help reduce home prices, although the movement in price was not enough to make a significant difference in mortgage affordability, especially given sky-high interest rates. More recently, prices have begun to rise again, especially in major cities.
Although rate hikes and cuts impacted the entire Canadian real estate market, Calgary’s housing market was slightly more shielded. While Calgary home prices jumped by 35% over the past 10 years, Toronto home prices jumped by 107%.
A few factors play into the current state of Calgary’s housing market. For one, Calgary has more relaxed zoning regulations than other major cities, with plans in the works to relax them even further. Despite this, new housing starts have failed to keep up with demand for housing. Calgary’s high average wages, low taxes, and low unemployment rate have allowed consumers to offer more and more for homes, as supply began to squeeze. As a result, prices have been climbing significantly in recent years.
Market Predictions for 2024 and Beyond
The future of Calgary’s housing market will depend heavily on how a number of different factors play out:
- Housing Supply: In July of this year, home prices slightly dipped when new supply hit the market. Calgary has consistently hit new records on housing starts over the past few years. Unfortunately, demand often outpaced new supply, preventing a price drop. The future of Calgary home prices will depend on the rate at which the city can inject more supply into the market, and whether or not that rate can keep pace with demand.
- Investor Activity: many real estate investors prefer Calgary, as the city produces higher rental yields than other major cities (on average). Currently, it is estimated that around 1/4th of Calgary real estate is investor-owned. While this can be a lucrative segment of the market, it also places further pressure on the housing supply, as more and more investors are drawn into the space.
- Interest Rates: The Bank of Canada has made it clear that the benchmark rate will be on the decline, at least through to the end of 2024. It is believed that the year will close out with a rate of 4.00%. Given the correlation between interest rates and housing prices, it is possible that rate cuts could further increase home prices in Calgary, especially if the underlying supply / demand problem is not resolved.
While it is impossible to truly predict the future of the real estate market, you can certainly prepare yourself to the best of your ability. Clover Mortgage’s expert team of brokers can help you get pre-approved for a mortgage, allowing you to increase your peace of mind, and your odds of success, in this current seller’s market. Contact us today to book a free consultation.
FAQ
Will housing prices drop in Calgary in 2024
Given that interest rates are expected to drop, and new housing starts have not been able to keep up with growing demand, it is very unlikely that home prices will drop in 2024. There is a possibility that prices will begin to drop in the latter half of 2025, but only if the current supply / demand dynamic is disrupted.
Is it a buyer’s or seller’s market in Alberta?
Currently, Alberta is in the midst of a seller’s market.
A seller’s market is a concept that can apply to other industries in addition to real estate (commodities, labour markets, etc.) and generally refers to a situation where demand exceeds supply. Currently, the demand for homes in Alberta is growing much faster than the available supply of homes, leading to a discrepancy. As such, sellers have much greater leverage in the negotiation process than buyers do, and can often charge more because there is a shortage of eligible homes.
Why is Calgary real estate so expensive?
Calgary’s real estate prices have mostly been driven by a growing demand, due to high quality of living, and job opportunities in the city, and a constrained supply. Although Calgary has broken records for housing start volume, and seems to be trying to fix this imbalance, supply has just been unable to keep up with demand in recent years — leading to higher prices.
