The nation’s resale real estate market appears to be recovering from a slowdown in activity that bottomed in the spring amid concerns over a trade war. Still, a new report from RBC Economics noted that Canada’s two largest markets — while seeing an increase in sales in July, year over year — remain weighed down by a lack of affordable supply for first-time buyers. In turn, new listings have grown year over year in Toronto and Vancouver to match rising sales, resulting in a decline in overall prices.

The study found the national picture is modestly brighter, though the large markets still are affecting growth. Resales grew nearly seven percent year over year and almost four percent month over month in July.

New listings grew about six per cent in July from last year, and were flat from June to July.

Prices were also flat month over month, though down about three percent from last year.

Calgary and Edmonton were among the three major markets seeing year-over-year declines in resales, down about nine and two percent respectively. Sales, however, increased about three per cent in Calgary month over month, while they grew almost two per cent in Edmonton. Vancouver was the other market in the study seeing a decline, down about two per cent year over year — though up nearly nine per cent in July from June.

New listings increased about eight per cent in Calgary and 16 per cent in Edmonton in July versus July last year. Month over month, listings grew about one per cent in Calgary, and nearly seven per cent in Edmonton. Despite declining demand in Edmonton, its MLS price index grew more than five percent year over year, though down about one percent month over month.

In Calgary, the price index declined about two percent in July compared with the same period last year, and was flat from June to July.

Courtesy the Calgary Herald

Thinking of building vs. buying a home? There are many factors to consider, such as your timeframe, the location and design of the house. Let’s take a closer look at the pros and cons of each option.

Benefits of Building vs. Buying a Home

Customization

When you build a home from scratch, you choose everything from the location to the floor plan to the finishes. You move into the house of your dreams, tailored to your tastes and how you want to use the space. No need to plan updates or renovations; you get to enjoy your customized space right from the start!

Control Over Costs

Building vs buying a house gives you more flexibility over costs. You choose the materials at each step of the process, and you decide where to spend more money and where to cut back. For example, you can go all out on a chef’s kitchen if that’s key to your enjoyment of your home and leave the basement unfinished as a future project.

Energy Efficiency

Newer homes are more energy efficient. Modern builds keep homes comfortable and utility prices low with features like low-e windows, foam insulation, and high-efficiency HVAC systems. Note that you can get tax credits and rebates for some energy-efficient home features.

Environmental Advantages

If you build vs buy, you can choose materials that are free of toxins and sustainably sourced. This lowers the impact on the environment and ensures your home is a healthy living space. You can also install features like solar panels, tankless water heaters, and a greywater recycling system more easily when building vs buying a home.

Fewer Repairs

A new build won’t need repairs to major systems or appliances for quite a while. Fewer repairs means more money you can put toward your mortgage or spend on things like travel and entertainment.

Less Market Competition

Housing inventory in Canada is critically low, and competition among buyers is high. Building vs buying a house in Canada means you don’t have to worry about bidding wars or waiving contingencies to get the home of your dreams.

Downsides of Building vs Buying a Home

Longer Timeline

A new home can be bought in a matter of days; a build takes an average of seven months, but can be much longer. During that time, you will need to spend time on the planning, visit the build site repeatedly, and pay for housing elsewhere.

Unexpected Costs and Delays

Your contractor will provide you with an estimate, but unexpected expenses often arise, pushing budgets up. Delays are extremely common and can increase your timeline by weeks if not months.

More Time Consuming

Building a home from the ground up is a lot of work. You have to choose a contractor, negotiate terms, decide on the layout and design, and choose cabinetry, fixtures, and finishes. Homeowners also need to visit the build site regularly and be in constant communication with the contractor. Time is a major consideration in the build vs buy decision.

Less Negotiating Room

Beyond the original negotiation with your contractor, you won’t have room to negotiate the cost of the build itself.

That said, choosing materials and finishes yourself can save you a lot of money. Do your research, and you can find ways to keep expenses down. In the build vs buy debate, building is more work, but offers key opportunities to save.

Benefits of Buying a Home

More Predictable Costs

Buying a home is often less expensive than building one, but this depends on location and market conditions. As long as you have a home inspection and a thorough title search, you won’t have the unexpected costs that often arise with new builds.

Established Location

If you want to be in an established community, it is much easier to find a home for sale than it is to find vacant land you can build on. Established neighbourhoods also have mature trees, well-thought-out infrastructure, and nearby amenities like parks and schools.

Faster Move-In

Your timeline is a key factor in the build vs. buy decision. If you buy a home, you could close in as little as 30 days; if you build, it will take 6-9 months if everything goes to plan. With delays, it can take much longer.

Fewer Decisions and More Convenience

Building a house involves numerous decisions, from the location to the light switch plates. If you buy instead of building, all you have to worry about is the move itself. Although you may want to make changes to the space, you can do it at a more leisurely pace.

More Negotiating Room

When buying a home, you can negotiate for a lower price, closing costs, or necessary repairs. If you’re buying land and building vs buying a house, you can negotiate on the price of the land, but most other costs will be as per your contractor’s estimate or higher.

Disadvantages of Buying a Home

Limited Customization Options

With an existing home, there’s only so much you can change. Things like paint colours and trim aren’t difficult to match to your taste, but the layout of the home can’t be changed without major renovations. If there is a particular feature you are looking for in a home, this gets even more challenging.

House-Buying Stress

In a seller’s market, finding the right home at the right price can be time-consuming and stressful. You might face a bidding war, rejected offers, and placing bids on multiple houses in a serial fashion. Competition in low-inventory markets can also drive prices up, and you could spend more than you originally planned.

Maintenance Issues

Older homes will need repairs and upgrades sooner than a brand-new one will. If you buy a home built before 1970, it may also contain asbestos or lead paint, which will need to be dealt with immediately. Regardless of the type of home you purchase, getting a home inspection is always recommended.

Both building a home and buying one can be excellent options for prospective homeowners, and deciding which is best can feel challenging. By carefully considering each factor, you can feel confident in making the right choice for your budget and lifestyle. Contact us today to discuss building versus buying in Calgary and the surrounding areas. We would be happy to put our experience to work for you.

Thanks to gains mostly occurring in the newer communities, inventory levels in July were 6,917 units, reaching levels not seen since prior to the pandemic and higher than long-term trends. While supply has improved across all property types and all districts, the largest gains are occurring in the areas where there has been new community growth. 

The additional supply has weighed on home prices in some parts of the city. The total residential benchmark price in Calgary has trended down over the past several months and is currently four per cent below last year’s peak price reported in June 2024. 

“Price declines are not occurring across all property types in all locations of the city, and even where there have been declines, it has not erased all the gains made over the past several years,” said Ann-Marie Lurie, Chief Economist at CREB®. “The steepest price declines have occurred for apartment and row style homes, mostly in the North East and North districts, which coincides with significant gains in new supply.” 

The rise in supply occurred as sales continued to slow and new listings improved. In July, there were 2,099 sales, a 12 per cent decline over last year, while new listings reached 3,911 units, an over eight per cent increase over last year. In addition to the persistent economic uncertainty due to tariffs, sales and new listings were impacted by no further reductions in lending rates and added competition from the new home market. Apartment-style homes are reporting the highest months of supply with over four months, while both detached and semi-detached homes are seeing conditions remain relatively balanced at just three months of supply.  

Detached

For the first time since 2020, the months of supply for detached homes rose to three months. Sales activity slowed to 1,031 units in July, while the number of new listings, despite being slower than last month, was still nearly 10 per cent higher than last year’s levels and above long-term trends. The wider gap between sales and new listings led to a significant adjustment in inventory levels and, with slower sales, the months of supply rose to three months.

However, conditions did vary significantly depending on location. In the North West, West and South districts, the months of supply remained well below three months, whereas the North East reported the highest months of supply at over four months. 

A shift to balanced conditions has taken much of the pressure off home prices. As of July, the detached benchmark price was $761,800, down less than one per cent over last year. However, there was a significant range of price adjustments. Both the North East and East districts have reported the largest decline in price at five per cent, though prices still rose in the City Centre by nearly two per cent. 

Semi-Detached

Sales activity in July continued to slow, contributing to the year-to-date decline of 11 per cent. At the same time, new listings have generally been higher this year compared to last year, supporting inventory gains. With 549 units in inventory and 187 sales, the months of supply in July rose to three months, something that has not happened since 2021. 

Although supply is improving in relation to sales, prices have remained relatively stable. As of July, the benchmark price in the city was $697,500, one per cent higher than last July. Price growth did range throughout each district, with the highest gains occurring in the City Centre, with nearly three per cent growth. Meanwhile, prices declined over last year in the North East, East and North districts.

Row

Like other styles of homes, sales have eased compared to last year, with new listings and inventories rising over last July. The months of supply in July was similar to last month at over three months, with a range of under three months of supply in the City Centre, North West , South and South East, to nearly five months of supply in the North East district.

Row prices have generally been trending down over the past three months, and while they are nearly four per cent lower than last year at this time, on a year-to-date basis they have remained similar to last year. When considering activity by district, year-to-date price declines have been reported in the North East and North, while prices have risen in all other districts.

Apartment Condominium

There were 1,014 new listings in July relative to 508 sales, keeping the sales-to-new listings ratio at 50 per cent and inventory levels elevated at 2,097 units. Higher inventories and slower sales caused the months of supply to push above four months in July, the highest it has been since 2021. Added competition for new product combined with rising rental vacancy rates has impacted the resale condominium market.

The additional supply choice is having a more significant impact on apartment style prices over any other property type. In July, the benchmark price was $329,600, which is down over one per cent compared to last month and nearly five per cent lower than levels reported last year. However, when considering year-to-date figures, prices have remained stable compared to last year as gains in the West, South and North West have offset declines occurring in the North East, North, South East and East districts.

REGIONAL MARKET FACTS

Airdrie

Due to declines in both row and apartment sales, July sales slowed by 14 per cent compared to last July, contributing to the year-to-date decline of 12 per cent. While sales have slowed, activity remains higher than levels reported prior to 2021. What has changed is the significant improvement in new listings, resulting in inventory gains. As of July, inventory levels rose to 543 units, the highest July reported since the peak in 2018. The higher inventory levels kept the months of supply above three months in July, placing some downward pressure on home prices. In July, the benchmark price was $532,800, nearly four per cent lower than levels reported last year at this time. However, last year’s gains were exceptionally high earlier in the year, and on a year-to-date basis prices are only slightly lower than last year.

Cochrane

Unlike other areas, Cochrane has not seen the same level of pullback in sales compared to long-term trends. While July sales were down by seven per cent, year-to-date sales are two per cent lower than last year and 23 per cent higher than long-term trends. New listings in July did reach a record high for the month, causing inventories to push to the highest level reported for the month since 2019 and causing the months of supply to rise above three months. While this likely contributed to some of the monthly decline in price, unlike other areas the July benchmark price of $590,000 was over two per cent higher than last year, and four per cent higher on a year-to-date basis.

Okotoks

This market continues to exhibit tighter market conditions than both Airdrie and Cochrane with a sales-to-new-listings ratio of 71 per cent and months of supply at just over two months. This is a significant improvement compared to the previous four years, where the months of supply in July was just over one month. In July, the benchmark price in the area was $628,500, slightly lower than last month, but higher than last year’s level. Despite some monthly fluctuations, year-to-date prices are over two per cent higher than last year.

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