Across Canada, the real estate market has seen dramatic fluctuations from all-time price highs in early 2022 in the Greater Toronto and Vancouver areas to significant price drops due to the 300 basis point interest rate hikes by the Bank of Canada. The Calgary area, however, has followed a bit of a different trend line. Oil price highs this year have positively impacted sales in the region with August posting only a modest dip year-over-year (y-o-y) of -0.5% in volume but a more impressive combined y-o-y benchmark price increase of 11% across all property types. Comparatively, sales volume in the GTA has dropped by 34% versus 2021. Sales activity driving growth in Alberta, specifically the Calgary area, is seen especially in the apartment condominium sector which is providing more affordable housing options despite the higher interest rates.
The Demand for Apartment Condos is Growing Rapidly
Apartment condo sales have increased a whopping 58% y-o-y in August 2022 and over 65% year to date in Calgary. Month-over-month (m-o-m), sales increased by 2%. While condo prices in August were relatively flat versus July, they have increased 10% y-o-y. Price points for condo apartments, however, have yet to reach the peak set back in 2014.
Detached homes in the area are falling a bit out of favour as national inflation is driving up the price of almost everything. Sales of single-family homes continue to trend down versus July and post a y-o-y decline of 18%. Prices have also trended downwards for detached homes since the high in May, however, the benchmark of $633,000 still records a 13% growth over 2021. Demand for homes under the $500K mark is extremely high and there is an increasing pinch on supply at this price point. Months of supply for all property types has dropped by almost 21% y-o-y and now sits at 2.24 months. This is 36% less than the national average of 3.5 months of property inventory. With supply down, the average property days on market has dropped almost 17% y-o-y as demand and competition amongst buyers heats up.
Home Buyers are Exercising their Options, Keeping Sales Activity Strong
While inventory gains in the surrounding areas of Airdrie, Cochrane, and Okotoks provide more promising conditions for buyers, the market conditions remain tight. Airdrie and Okotoks have also experienced price declines in the past few months while Cochrane’s benchmark prices are holding relatively stable.
According to the Calgary Real Estate Board’s Chief Economist, Anne-Marie Lurie, “higher lending rates have slowed activity in the detached market, [but] we are still seeing homebuyers shift to more affordable options which is keeping sales activity relatively strong…this makes Calgary different than some of the larger cities in the country which have recorded significant pullbacks in sales.”
Carrie is the Chief Operating Officer at Zoocasa. A passionate people and business leader who comes to Zoocasa with over 20 years of experience in the Canadian marketing and digital spaces. She was recognized as one of the Top 50 Executives in Canada in 2021 by the Globe and Mail for her work within the Zoocasa team and helping to lead this award winning proptech and brokerage company. Carrie writes about a variety of real estate topics to help inform and educate buyers and sellers on the way to their forever home.