Alberta’s strong economic performance continues to fuel commercial real estate in Calgary, with most asset classes experiencing solid activity from both a lease and sales perspective.

Spillover from out of province remains a major source of business in the industrial sector, with warehousing and distribution properties topping the list of investor demands. Given limited availability of industrial space in the lower mainland, most containers that are shipped to BC are now loaded onto trucks for a 13-hour journey to Calgary’s ‘inland port.’ The supply of serviced land zoned industrial has fallen as a result, placing upward pressure on prices and raising lease rates, especially for newer product. Older properties available for sale may provide better returns, or more affordable rental opportunities. Availability continues to trend downward despite on-going new construction, with rates falling to 3.9 per cent in the first quarter of 2023, down from 5.5 per cent during the same period one year ago, according to Altus Group. De Havilland Canada is one of the recent companies to set up shop in Calgary, through its acquisition of 1500 acres in Wheatland County just 30 minutes east of Calgary. The company intends to build a state-of-the-art facility that includes aircraft assembly, runway, parts manufacturing, distribution centres and maintenance repair and overhaul centre. De Havilland Field is expected to be up and running in 2025 and employ more than 1,500 people.

Calgary’s office market has made some headway in the first quarter of the year, with availability rates edging downward. Two factors have contributed to the decline: the uptick in tech businesses and the repurposing of existing commercial to residential. Attracted to the value proposition of the Calgary commercial real estate market, a young workforce, and incentives offered by the Alberta’s Investment and Growth Fund, tech companies, including global tech firm Applexus Technologies, have started moving into the downtown core. Commercial repurposing has also met with success, thanks in large part to a government program providing incentives to convert office space to residential. Ten buildings have been earmarked for repurposing, representing more than 1,200 new homes in the core. The move also eliminates one million square feet of empty office space. Together, these factors have had an enormous impact on the downtown core, increasing vibrancy and sparking renewal in the city that includes a strong retail/restaurant component to service the growing residential presence. These two incentive programs have been so effective to date that lease rates are starting to climb in the core once again.

Suburban office space, particularly in Calgary’s Quarry Park, has been an attractive alternative to the core in recent years, with Imperial Oil leading the charge to the suburbs about eight years ago. The low-key presence within residential communities continues to resonate with many tenants. Lease rates for office space in the suburbs range from $10 per square foot to $15 per square foot.

Low vacancy rates characterize demand for retail space and buildings in Calgary at present. The area’s shopping malls remain vibrant, with Canadian Tire taking over many of the Bed, Bath and Beyond locations in Calgary.

Land sales overall remain brisk, with out-of-province investors seeking industrial, multi-family, and retail properties for development. Existing multi-family is experiencing solid demand from Ontario buyers, especially for new buildings with assumable CMHC financing in place. Recent data available from the Canadian Home Builders Association’s (CHBA) 2022 Municipal Benchmarking Report, prepared by Altus Group, shows that estimated approval timelines for residential development are amongst the fastest in the country at five months in 2022, down from 12 months in 2020. Cap rates in this segment of the market have waned over the past year. REITs are active in the market, typically seeking land zoned residential with approvals for purpose-built rentals in place. Given the higher interest rate environment, some vendor take back mortgages are available but they are generally found on overpriced listings.

Strong population growth, government incentives, and lower tax structures continue to draw companies both east and west of the province to Calgary and its surrounding communities. After an extended period of financial hardship between 2010 and 2020 in the province, the rebound in oil and gas prices, combined with a growing tech centre, and new residential development in the downtown core, are changing the landscape for the better.

**Courtesy RE/MAX Canada**

APRIL 2023 HOUSING MARKET UPDATE

MAY 1, 2023

Prices reach new record high

Persistent sellers’ market conditions placed further upward pressure on home prices in April. After four months of persistent gains, the total unadjusted benchmark price reached $550,800, nearly two per cent higher than last month and a new monthly record high for the city. 

“While sales activity is performing as expected, the steeper pullback in new listings has ensured that supply levels remain low,” said CREB® Chief Economist Ann-Marie Lurie. “The limited supply choice is causing more buyers to place offers above the list price, contributing to the stronger than expected gains in home prices.”

In April, sales reached 2,690 units compared to the 3,133 new listings. With a sales-to-new-listings ratio of 86 per cent, inventories declined by 34 per cent compared to last year and are over 45 per cent below long-term averages for April.

While sales have eased by 21 per cent compared to last year, the steep decline in supply has caused the months of supply to ease to just over one month. This reflects tighter market conditions than earlier in the year and compared to conditions reported last April.

Detached

New listings have eased across all price ranges in the detached market, with the most significant declines occurring for homes priced below $700,000. The decline in new listings far outpaced the pullback in sales, causing the sale-to-new listings ratio to rise to 88 per cent and the months of supply to fall to just over one month, tighter than both last year and last month. 

The persistently tight market conditions have contributed to further price growth. In April, the detached benchmark price reached a new record high at $661,900. Every district except the City Centre reported a new record high price in April. The City Centre is also the only district that reported over two months of supply. With a year-over-year gain of 6 per cent, the most affordable East district reported the largest price gain. 

Semi-Detached

With 234 sales and 264 new listings in April, the sales to new listings ratio jumped to 89 per cent. This caused further declines in inventory levels, which are at the lowest April level seen since 2007. As conditions are tighter than last year, it is not a surprise to see further price growth.

The unadjusted benchmark price in April reached and new record high at $593,200, reflecting a two per cent gain over last month’s and last year’s prices. While all districts posted a new record high price this month, the strongest gains occurred in the most affordable North East and East districts.

Row

Row properties faced the tightest market conditions in April, with a sales-to-new-listings ratio of 95 per cent and months of supply under one month. Row sales have eased over last April’s record high, but with 416 sales, activity is still far stronger than long-term trends. Relative affordability has supported the strong demand in this sector. However, the persistently tight market conditions have placed significant pressure on home prices.

After four consecutive monthly gains, the benchmark price reached a new record high of $387,400, over seven per cent higher than last year. Like other areas, the steepest price growth occurred in the most affordable districts of the North East, East and South.

Apartment Condominium

Thanks to a boost in new listings in April, the apartment condominium sector was the only sector to see sales activity rise over last year’s levels. With 953 new listings and 734 sales, inventories did trend up over the previous month but remained below the levels reported last year at this time. With a sales-to-new-listings ratio of 77 per cent and a months of supply of 1.5, conditions are not as tight as other property types in the city. However, this still reflects sellers’ market conditions and has been driving up prices. 

As of April, the unadjusted benchmark price reached $299,400, a significant gain over the $277,600 reported at the start of the year and over 10 per cent higher than last April. Following four months of consecutive gains, prices are now just shy of the previous high reported in 2014. While price gains across all districts have not resulted in a new city-wide record, the North, North West and South East reported new highs in April. 

REGIONAL MARKET FACTS

Airdrie

While sales in April trended up compared to last month, new listings eased, causing the sale-to-new listings ratio to once again push near 100 per cent, and inventories fell to the lowest April reported since 2007. While conditions are not as tight as last April, with one month of supply, conditions continue to favour the seller. 

Limited choice compared to demand contributed to the upward pressure on home prices compared to earlier this year. As of April, the benchmark price reached $502,000, an improvement from the $480,200 reported in January but nearly two per cent below the April 2022 record high of $510,700.

Cochrane

With 114 sales and 116 new listings, April’s sales to new listings ratio rose to 98 per cent. While inventories are still higher than what was reported in the market last year, with nearly all new listings selling, inventories trended down over levels seen earlier in the year. With only 142 units available, the months of supply dropped to just over one month, ensuring the market continued to favour the seller. 

Renewed tight market conditions contributed to the third consecutive monthly price gain, and the benchmark price pushed up to $509,600 in April. However, despite the monthly gains, prices remain nearly two per cent below last April, and the peak price of $522,600 reached in June of last year. 

Okotoks

Both sales and new listings trended up in April over levels seen earlier in the year, supporting some monthly gains in inventory levels. However, with only 67 units in inventory, levels are 66 per cent below long-term trends for the month and reflect the lowest April since 2006.

With just over one month of supply that has persisted for the past three months, we have seen 

further upward pressure on home prices in the town. As of April, the unadjusted benchmark price reached $577,300, nearly five per cent higher than last April and a new record high.

Click here to view the full City of Calgary monthly stats package.

Sales activity has behaved as expected through the start of 2023 and slowed by 43 percent over last year’s all-time record-high performance in the first quarter. The steeper decline in the first quarter was expected, given the surge in sales last year, as purchasers were eager to enter the market ahead of expected rate gains.

“While no further rate gains have occurred so far this year, the higher lending rates and limited supply options are contributing to some of the pullbacks in sales,” said CREB® Chief Economist Ann-Marie Lurie. “Nevertheless, despite the decline, sales activity has remained well above pre-pandemic levels thanks to recent gains in migration coupled with a stronger employment market.”

The most notable challenge in the market has been related to supply levels. New listings were expected to ease as higher lending rates would make it more difficult for the move-up buyer. However, the pace of decline in new listings has exceeded expectations. New listings in the first quarter declined by 40 percent, preventing any significant shift in the supply levels given the relatively strong sales.

Inventory levels in the city averaged 2,814 units in the first quarter, 21 percent lower than last year’s levels and over 42 percent below long-term trends for the first quarter. With a sales-to-new-listings ratio of 71 percent and a months of supply of under two months in the first quarter, conditions continue to favour the seller.

Exceptionally tight market conditions early last year drove significant price gains throughout the 2022 spring market, peaking at $544,733 in the second quarter. While supply-demand balances remained tight throughout 2022, prices did trend down over the third and fourth quarters, somewhat adjusting for the rapid rise earlier in the year.

Further tightening in the supply-demand balance in the first quarter was enough to stop the downward price trend as the quarterly benchmark price rose by nearly two percent over the fourth quarter to $531,200 but remained below the Q2 high.

“Some of the fluctuations in price were expected this year, given what happened last year,” said Lurie. “However, price growth to date has been stronger than expected. Given the limited supply currently on the market, we could expect to see some stronger price growth through spring, potentially supporting a modest annual gain in 2023.”

Read more here

MARCH HOUSING MARKET UPDATE

April 3, 2023

Prices rise as conditions favour the seller

Sales and new listings have improved over the levels reported at the beginning of the year. As a result, the spread between sales and new listings supported some expected monthly inventory level gains. However, the 3,233 available units reflected the lowest March inventory levels since 2006 and left the months of supply just above one month, firmly in the seller’s territory. While conditions are not as tight as last March, low inventory levels leave purchasers with limited choice, once again driving up home prices.

Total unadjusted residential home prices reached $541,800 in March, a two per cent gain over last month and nearly one per cent higher than prices reported last year. While prices remain below the May 2022 high of $546,000, the pace of price growth over the first quarter has been stronger than expected due to the persistent seller’s market conditions.

“As expected, sales have eased from record levels while remaining stronger than they were before the pandemic thanks to recent gains in migration supporting demand,” said CREB® Chief Economist Ann-Marie Lurie.

“The challenge has been centered around supply. As a result, existing homeowners may be reluctant to list as they struggle to find an acceptable housing alternative in this market. At the same time, higher lending rates can also reduce the incentives for existing homeowners to list their home.”

March recorded 3,318 new listings compared to the 2,432 sales, leaving the sales-to-new listings ratio relatively high at 73 per cent. However, both sales and new listings have eased by 40 per cent compared to levels reported last March.

Detached

Lower listings and higher lending rates have contributed to the steep pullback in detached sales. With 1,145 sales, this is the only property type where activity has fallen below long-term trends for the month. However, despite the drop in sales, inventory levels remain comparable to the lowest March levels recorded in 2006.

The persistently tight market conditions have contributed to further price growth. In March, the detached benchmark price reached a new record high at $649,800. Conditions are much tighter at the lower end of the market as supply levels have shifted. Nearly 63 per cent of the new listings that have come onto the market so far this year are priced over $600,000, much higher than the 48 per cent reported last year.

Semi-Detached

Like other property types, sales and new listings reported a significant drop over last year’s levels, leaving the market exceptionally tight with a sales-to-new listings ratio of 78 per cent in March. In addition, higher lending rates have driven many purchasers to seek semi-detached properties. However, conditions remained exceptionally tight for properties priced below $600,000.

Low inventory levels relative to the sales in the market drove further price gains this month. As a result, the unadjusted benchmark price reached $581,300 in March, over two per cent higher than last month and nearly two per cent higher than last year’s levels. However, despite the strong gains over the past several months, prices remain shy of the May 2022 monthly high of $584,700.

Row

While row sales, new listings and inventory levels have all trended up compared to levels seen at the start of the year, like other property types, levels are much lower than last year. With one month of supply available, conditions continue to favour the seller. The tight market conditions also placed further upward pressure on prices.

In March, the benchmark price rose to $378,100, reflecting a year-over-year gain of nearly eight per cent and representing a new monthly record high. Price growth was strongest in the city’s North East and South districts, with the lowest year-over-year gains occurring in the West district.

Apartment Condominium

March reported 682 apartment condominium sales, a decline of 11 per cent over last year’s record high. New listings also eased by eight per cent compared to last year, keeping inventory levels relatively low at 1,000 units. The low inventory levels compared to sales kept the months of supply well below two months, ensuring the market continued to favour the seller.

The benchmark price in Calgary reached $293,500, a year-over-year gain of nearly 11 per cent. The recent increase in price is shifting this market closer to full price recovery. For example, apartment condominium prices reached a monthly high back in November 2014 at $306,600.

REGIONAL MARKET FACTS

Airdrie

With 154 sales and 203 new listings in March, the sales-to-new listings ratio pushed up to 76 per cent, and inventory levels fell to the lowest levels for the month since 2014. While conditions are not as tight as they were last year, the months of supply did fall to the lowest level seen in over eight months. The months of supply in Airdrie has not risen above two months since January 2021, and the persistent tightness so far this year has caused prices to trend up again compared to levels seen at the end of 2022.

In March, the benchmark price reached $497,400, a two per cent gain over last month. Despite the recent improvements, levels are nearly two per cent below last year’s and still below the monthly peak of $510,700 reported in April 2022. While prices are still lower than last year’s peak, it is important to keep a perspective on how much prices have risen in this market over the past several years. As of March, the benchmark price is over 20 per cent higher than the levels reported in March 2021.

Cochrane

While both sales and new listings have improved over levels seen over the past several months, they are still much lower than the high levels reported last year. In addition, unlike other areas, inventory levels are higher than the low levels reported in the previous year. However, with only 155 units available in March and sales of 87, the months of supply has once again fallen below two months.

For the second month in a row, residential benchmark prices increased over the previous month reaching $501,900. Despite the monthly gain, prices are still slightly lower than last year’s levels, and the monthly high achieved in June of 2022 at $522,600. Like Airdrie, prices in the area have risen significantly over the past several years and are over 20 per cent higher than levels reported back in March 2021.

Okotoks

Sales and new listings have improved over levels seen earlier this year. However, with 55 sales and 67 new listings, conditions remained exceptionally tight, and with 61 units available in March, levels were amongst the lowest levels ever recorded for the month. Before the March 2020 pandemic, Okotoks would typically see over 200 units available in inventory.

With one month of supply, conditions continue to favour the seller placing upward pressure on prices. After three consecutive months of price gains, in March, the benchmark price reached $561,600, a new record high for the area.

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

The changes came in response to widespread concerns over housing affordability

The Canada Mortgage and Housing Corporation has announced several changes to the “Prohibition on the Purchase of Residential Property by Non-Canadians Act”, which came into effect on January 1.

The ban forbids any direct or indirect purchase of residential property by non-Canadians for a two-year period.

CMHC said that it made some amendments in response to widespread concerns over housing affordability, in particular the expansion of “exceptions to allow non-Canadians to purchase a residential property in certain circumstances.”

The revisions now allow more work permit holders to purchase a home they can live in while working in Canada.

“Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at the time of purchase, and they have not purchased more than one residential property,” CMHC said. “The current provisions on tax filings and previous work experience in Canada are being repealed.”

The revisions also repealed the prohibition on land zoned for residential and mixed purposes.

“Vacant land zoned for residential and mixed-use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development,” CMHC said.

An exception for development has been included, allowing non-Canadians to purchase residential property for the purposes of development.

“The amendments also extend the exception currently applicable to publicly traded corporations under the Act, to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian,” CMHC said.

Additionally, the changes increased the threshold of foreign control for corporations investing in Canadian housing.

“With regards to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian, the control threshold has increased from 3% to 10%,” CMHC said. “This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.”

The changes came into force on March 27.

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” said Ahmed Hussen, Minister of Housing and Diversity and Inclusion. “These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”

2022 proved to be a rocky year for Canadian real estate. Between a looming recession, rising interest rates and challenges around capital availability, homebuyers and sellers from coast to coast experienced disruption. Yet with a trend towards cooling prices and tighter monetary policies set to slow the pace and pressure of recent years, the outlook for 2023 is one of both hope and caution.

This work explores the cultural context and influential trends set to shape the real estate and housing landscape in Canada in the year ahead. Through six key themes, we explore how people’s attitudes and values toward buying, owning, and selling homes are shifting and what these themes mean for real estate agents.

Click here for the full report

Courtesy RE/MAX Canada

The RE/MAX International conference took place last week in Las Vegas, the Viani Real Estate Group was honoured to be recognized among some of the top-producing REALTORS® in the entire RE/MAX network. 

The Viani Real Estate Group helped over 125 friends, families, businesses and investors achieve their real estate goals in 2022. Through the diverse skill set of our group, we were able to assist clients with their residential, commercial and rural needs. 

Thank you to all of our clients, those who referred clients to us and to our families for their continued support, without each of you we could not achieve such success.

Contact us today to achieve your real estate goals, put our experience to work for you.

Best Wishes
www.vianigroup.com
Viani | Lang | Kushner | Cheema | Keogh

FEBRUARY HOUSING MARKET UPDATE

March 1, 2023

Consistent with typical seasonal behavior sales, new listings and inventory levels all trended up compared to last month. However, with 1,740 sales and 2,389 new listings, inventory levels improved only slightly over the last month and remained amongst the lowest February levels seen since 2006.

“While higher lending rates are impacting sales activity as expected, we are seeing a stronger pullback in new listings, keeping supply levels low and supporting some stronger-than-expected monthly price gains,” said CREB® Chief Economist Ann-Marie Lurie. “Prices are still below the May 2022 peak and it is still early in the year. However, if we do not see a shift in supply, we could see further upward pressure on prices over the near term.”

Both sales and new listings declined over last year’s record high for the month. While sales activity remained stronger than long-term trends and levels reported throughout the 2015 to 2020 period, new listings fell below long-term trends.

With a sales-to-new-listings ratio of 73 per cent and a months of supply of under two months, the market has struggled to move into balanced territory causing further upward pressure on home prices. The unadjusted benchmark price increased by nearly two per cent over January levels and last year’s prices.

Detached

Both sales and new listings reported significant year-over-year declines over last year’s record high. While the seasonal monthly gain did see inventories move up over the last two months, levels are still amongst the lowest seen in February, and the months of supply fell below two months.

Further tightening conditions did cause the unadjusted benchmark prices to rise over last month’s levels, but at a price of $635,900, it is still below the peak reported in May 2022. While supply continues to remain a challenge relative to demand for lower-priced homes, we are seeing conditions shift into balanced territory for homes priced above $700,000.

Semi-Detached

Like the detached sector despite the seasonal monthly gain, both sales and new listings fell from last year’s record high. While inventories are starting to rise over the levels seen in the past few months, they remain amongst the lowest levels reported for February. The relatively low inventory levels caused the months of supply to fall below two months in February, while it is still higher than last year’s ultra-low levels, conditions continue to favour the seller.

The unadjusted benchmark price reached $568,100 in February, nearly two per cent higher than last month and a three per cent gain over last February. Persistently tight market conditions contributed to the monthly unadjusted gain in the benchmark price. However, like detached properties prices remain below the May 2022 peak.

Row

Conditions remained exceptionally tight in February with only one month of supply and a sales-to-new listings ratio of 87 percent. While row sales have eased over record levels, they have remained relatively strong for February as demand shifts toward the affordable product in the market.

The persistently tight conditions caused further upward pressure on prices. In February, the unadjusted benchmark price reached $369,700, a monthly gain of over two per cent and a year-over-year gain of nine per cent. Unlike the other sectors, prices have reached a new high this month.

Apartment Condominium

Sales for apartment condominiums did not see the same pace of decline as other property types in February partly due to the level of new listings coming onto the market. Persistently strong sales compared to listings have caused February inventory levels to remain relatively low compared to levels seen over the past eight years and the months of supply once again dropped below two months.

The tight market condition contributed to the upward pressure on prices. In February, the unadjusted apartment benchmark price reached $286,000, nearly three per cent higher than last month and over 11 per cent higher than last February. While prices are still higher than the levels reported last year, they remain nearly seven per cent below the peak levels reported back in 2014.

REGIONAL MARKET FACTS

Airdrie

Inventories continued to improve in February but with only 178 units available levels are still well below longer-term trends for the month ensuring that the months of supply remained below two months.

The unadjusted benchmark price in February rose over last month keeping it comparable to levels seen last year at this time. However, with a benchmark price of $487,200, prices remain below the peak price of $510,700 reported in April 2022.

Cochrane

Like Airdrie, inventory levels have also been on the rise in Cochrane. While February levels are double what was available in the market last year, inventories remain over 40 per cent below long-term trends for the month. Nonetheless, both sales and new listings have eased so far this year helping the market shift toward more balanced conditions.

The February benchmark price did improve both over last month’s and last year’s levels. However, with an unadjusted price of $492,900, levels are still below the $522,600 peak reached in June of 2022.

Okotoks

While both sales and new listings have slowed compared to last year, conditions remained exceptionally tight with a sales-to-new listings ratio of 90 per cent. Inventory levels also continued to fall both compared to last month and last year, with levels nearing the February 2006 record low.

As conditions continue to favour the seller, it is not a surprise that we continue to see upward pressure on home prices. In February, the unadjusted benchmark price reached $555,000, three per cent higher than last month’s and last February’s levels. However, like some areas, prices remain just shy of the May peak of $560,700.

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

The Viani Real Estate Group is honoured to be recognized as the #4 top-producing team at RE/MAX Real Estate (Central) for 2022.

In addition, the Viani Real Estate group also achieved Diamond Team status, one of only four teams to do so at RE/MAX Real Estate Central.

RE/MAX Real Estate (Central) has been recognized as the #1 RE/MAX office in the world for either the number of sales, total sales volume or both for the past 23 years and has over 250 realtors, we are proud to say we were amongst the top producing realtors at this number one RE/MAX office in the world.

The Viani Real Estate Group helped over 130 friends, families, businesses and investors achieve their real estate goals in 2022. Through the diverse skill set of our group, knowledge and experience we were able to assist clients with their residential, commercial and rural needs.

Thank you to all of our clients for your continued support, buying or selling real estate is likely one of the largest investments you will make, we appreciate being your realtors of choice.

Thank you to those who referred clients to us, there is no higher compliment than the referral of your family and friends, and to our families for their continued support, without each of you, we could not achieve such success.

We look forward to hearing from you in 2023 and the Viani Real Estate Group has some exciting news coming in the next couple of weeks.

Contact us today to achieve your real estate goals, put our experience to work for you.

Best Wishes
www.vianigroup.com
Viani | Kushner | Richter | Lang 

JANUARY HOUSING MARKET UPDATE

Feb. 1, 2023

Supply of lower-priced homes remains low for January

The level of new listings in January fell to the lowest levels seen since the late 90s. While new listings fell in nearly every price range, the pace of decline was higher for lower-priced properties.

At the same time, sales activity did slow compared to the high levels reported last year but remained consistent with long-term trends. However, there has been a shift in the composition of sales as detached homes only comprised 47 per cent of all sales.

“Higher lending rates are causing many buyers to seek out lower-priced products in our market,” said CREB® Chief Economist Ann-Marie Lurie. “However, the higher rates are likely also preventing some move-up activity in the market impacting supply growth for lower-priced homes. This is causing differing conditions in the housing market based on price range.”

With 2,451 units available in inventory, levels remain 43 per cent lower than long-term trends for the month. While overall inventory levels are slightly lower than last January, there is significant variation by price range. Homes priced under $500,000 reported year-over-year inventory declines of nearly 30 per cent while inventory levels improved for homes prices above that level.

Although conditions are not as tight as last year, lower supply levels are preventing a significant shift toward balanced conditions and prices did trend up slightly over last month breaking the seven consecutive month slide. As of January, the benchmark price reached $520,900, 5 per cent higher than last January, but still well below the May 2022 high of $546,000.

Detached

Detached home sales saw the largest pullback despite the year-over-year rise in inventory levels. Higher lending rates are cooling demand for higher-priced homes which is supporting inventory gains. Meanwhile, a limited supply of lower-priced products is preventing stronger sales in the lower price ranges.

The variation within the market is likely causing divergent trends in pricing as prices have trended down in the higher-priced City Centre, while still reporting some modest gains in other districts of the city. Overall, the benchmark price reached $622,800 in January, slightly higher than levels reported in December, but still below the monthly high achieved in May 2022.

Semi-Detached

Sales in January slowed relative to last year’s levels but remained above levels achieved before the pandemic. At the same time, a pullback in new listings has left inventory levels below the already low levels reported last January. Like the detached sector, semi-detached homes have seen shifts where the demand remains strong for lower-priced product relative to the supply likely causing divergent trends in pricing.

In January, most districts reported a monthly benchmark price growth. However, prices did trend down in the higher-priced City Centre district causing Calgary’s semi-detached benchmark prices to ease slightly over levels seen in December 2022. Despite the monthly adjustment overall, prices remained nearly six per cent higher than levels reported in January 2022.

Row

Row homes sales slowed over last year’s record high but remained well above long-term trends for the month. Sales would have likely been stronger if more listings came onto the market. In January, new listings dropped over the previous year and were over 20 per cent below long-term trends. The adjustments in both sales and new listings did little to change the low inventory scenario and the months of supply remained below two months in January.

The persistently tight conditions did also prevent any downward pressure on prices which posted a nearly one per cent gain over December levels. With a benchmark price of $361,400, levels are still over 12 per cent higher than last January, and only slightly lower than the $363,700 monthly high achieved in June 2022.

Apartment Condominium

Sales for apartment condominiums did not see the same pace of decline as other property types in January partly due to the level of new listings coming onto the market. Nonetheless, inventory levels remained well below long-term trends for the month and have not been this low in January since 2014.

The adjustments to both sales and inventory have left this sector with a months of supply that is lower than levels seen at the start of 2022. The shift to affordable options is also impacting prices within the apartment condominium sector. In January, prices trended up from December levels driven by strong gains in the lower priced district of the North East and East. Overall, apartment condominium prices in the city reached $277,600, one per cent higher than last month and a year-over-year gain of nearly 10 per cent, narrowing the spread from the record high prices set in 2014.

REGIONAL MARKET FACTS

Airdrie

January sales eased over last year’s record high but remained consistent with long-term trends for the month. The pullback in sales did outpace the pullback in new listings causing inventory levels to improve over the exceptionally low levels reported last year. Despite the inventory gain, levels remain over 50 per cent lower than long-term trends for January

These shifts in the market have caused the months of supply to rise over last January’s 2022 record low. However, with less than two months of supply, conditions continue to remain relatively tight and supported a modest monthly price gain. In January, the benchmark price reached $480,200, nearly eight per cent higher than last January, but still below the monthly peak of $510,700 achieved in April 2022.

Cochrane

January sales eased over last year’s record high but remained comparable to long-term trends for the month. At the same time, new listings also slowed, but not at the same pace as sales. Inventory levels also rose from the near record lows reported last January. While improving inventories is likely welcome news to most buyers, inventory levels are still nearly 40 per cent below long-term trends.

Shifts in both sales and inventory have caused the months of supply to rise to nearly three months. This has taken some of the pressure off home prices which have seen exceptional gains over the past two years. Overall, the benchmark price in January was $488,900, over one per cent lower than last month but still seven per cent higher than January 2022 levels.

Okotoks

Both sales and new listings slowed in January compared to last year, preventing any significant addition to inventory compared to what was available in the market at the end of 2022. While there is more supply in the market compared to last January’s record low, with only 56 units available, this is still 61 per cent below long-term trends for the town.

The persistently tight market conditions have supported significant price growth over the past several years. While recent shifts have taken some of the pressure off the pace of price growth, prices did see some further gains this month. In January, the benchmark price reached $539,000, an increase from December and a year-over-year gain of nearly seven per cent.

Click here to view the full City of Calgary monthly stats package.

Key indicators combined with lender risk mitigation measures shore up expectations of resilience.

Interest rate hikes served to destabilize most major Canadian housing markets beginning in 2022, however a new report from RE/MAX Canada reveals that homeowners are well-positioned to ride out the coming storm in large part due to lower loan-to-value ratios on new mortgages.

The RE/MAX 2023 Canada Housing Barometer Report examined average price and new mortgage values published by CMHC-Equifax Canada in 12 major markets from British Columbia to New Brunswick, to compare loan-to-value (LTV) ratios between Q3 2012 and Q3 2022. The report found that LTV ratios had declined in 67 percent of markets (eight) over the past decade, with the greatest drops noted in London and Moncton (21 percent), Halifax (15 percent), Hamilton (14 percent), Toronto (10 percent) and Ottawa-Gatineau (nine percent). Four markets, including Calgary, Edmonton, Saskatoon, and Regina, were up over 2012 levels, a trend that is set to reverse in the years ahead as Alberta and Saskatchewan’s economic engines gain momentum and drive home-buying activity. The lowest loan-to-value ratios were found in the most expensive markets, including Vancouver (50 percent), Toronto (53 percent), and Hamilton (54 percent) while the highest loan-to-value ratios were found in Regina (88 percent) and Edmonton (83 percent). Nationally, loan-to-value ratios hovered at 57 percent.

Three factors were largely responsible for the downward pressure on loan-to-value ratios over the past decade, according to the Canada Housing Barometer Report: equity gains, the pandemic facilitating the ability to work remotely in smaller markets, and the transfer of intergenerational wealth, particularly in the latter half of the last decade and the early 2020s.

FACTS & STATS

• MARKETS WITH THE LOWEST APPRECIATION OVER THE 10 YEAR PERIOD REPORTED THE HIGHEST LOAN TO VALUE RATIOS.

• 8 OUT OF 12 MARKETS ANALYZED SAW THE LOAN-TO-VALUE RATIO DECLINE OVER THE 10 YEAR PERIOD EXAMINED.

• THREE FACTORS WERE LARGELY RESPONSIBLE FOR THE DOWNWARD PRESSURE ON LOAN-TO-VALUE RATIOS OVER THE PAST DECADE.

“Risk factors for the overall housing market are greatly reduced when homeowners own a larger proportion of their homes. With half of loan-to-value ratios within the 50- and 60-per-cent range in Canadian markets, homeowners are better able to withstand downward pressure on housing values and fewer will find themselves underwater, carrying upside down loans.”

Canadian buyers are much better qualified than a decade ago as a result, according to the RE/MAX report. A recent CMHC-Equifax Canada report confirmed a significant reduction in the number of buyers with credit scores under 660 in the past decade. Nationally, that number fell to 4.7 percent in the third quarter of 2022, down from eight percent a decade earlier. Ottawa-Gatineau, at 3.9 percent, had the lowest share of new mortgage holders with credit scores below 660, while Winnipeg had the highest at 6.4 percent. The loan-to-value ratio in all markets was down from decade-ago levels.

Mortgage delinquency rates have also fallen in most markets across the country, with the national percentage sitting at just 0.14 percent – down just over 63 percent from levels reported in 2012. The lowest rates can be found in Ontario and British Columbia, where the delinquency rates are below 0.08.

Rapid population growth was identified as a primary catalyst in driving home-buying activity over the past decade, with the quarterly population estimate rising 12.1 percent nationally from Q3 2012 to Q3 2022. Interest rates also played a starring role over the 10-year period, with the overnight rate dropping to 0.25 percent in May of 2009 and maintaining relatively low levels throughout the 2010s, climbing in 2018 and 2019 only to fall again to 0.25 percent in 2020.

Population growth is expected to continue in the years ahead, given the federal government’s commitment to increase immigration levels, but interest rates will likely remain relatively high in the foreseeable future, which should temper home-buying activity to some extent, particularly in the first half of the year.

“As we head into 2023, there are likely to be challenges, but a healthy number of homebuyers are expected to continue to enter the country’s housing markets from coast to coast,” says Ash. “The trend toward smaller markets should continue to play out in Atlantic Canada, Ontario and Western Canada —areas where in-migration from more expensive markets has occurred recently. Major centres in Alberta and Saskatchewan are expected to see strong growth in the year ahead as provincial economies continue to operate on all cylinders. However, there could be some tough times ahead for larger markets that are seeing an uptick in over-extended buyers, as well as increased financial hardships for parents who helped their kids into homeownerships by taking out Home Equity Line of Credit (HELOCs). While most chartered banks are typically willing to work with homeowners in distress situations, buyers that chose to work with private lenders are having a different experience, as evidenced in recent stories in the media.”

While overall risk to the Canadian housing market remains low, risk mitigation remains top of mind for regulators, given real estate’s impact on the Canadian economy. The sector has accounted for 10 to 17 percent of GDP in recent years. The government’s OSFI stress test is among the additional measures aimed at reinforcing the country’s real estate market going forward. While still in development, it would look at addressing three key factors: mortgage size and debt load, new debt service ratios, plus a new interest rate stress test. Given the success of the Stress Test to date (qualifying buyers at two percent above posted rates since 2018), it’s clear some constraints can prove invaluable. That said, further measures that would make it more difficult for Canadians to realize home ownership, while well-intentioned, may potentially cause more harm than good.

“At the end of the day, what’s evident by the loan-to-value ratios and by policies to discourage speculation and over-extension is that real estate is and will always be a long-term hold,” explains Alexander. The Canada Housing Barometer Report shows that most purchasers are aligned with that philosophy, as demonstrated by their tenacity to get into the market and hold steady. Savvy homebuyers and homeowners are looking to offset carrying costs by reducing their footprint—choosing smaller homes, as reported in Ottawa, or renting out basement suites in their homes, a trend noted across the board, but especially apparent in London and Saskatoon. Some buyers are purchasing duplexes and other multi-unit properties and living in one of the units. Multi-generational sales are also happening with increasing frequency across Canada, whereby two or three generations live together. This trend was strong in Toronto’s 905 region, as well as in Winnipeg and Saskatoon.

“The bottom line is that the dream and desire for home ownership is unmistakable,” says Alexander. “The mechanisms in place to underpin stability are working, and although more challenging conditions in 2023 may cause some to temporarily take pause, the longer-term outlook remains positive. Once the Bank of Canada has signalled that it is done with quantitative tightening, the market is expected to return to more normal levels of homebuying activity overall.”

REGIONAL HIGHLIGHTS

Calgary

Alberta’s strengthening economic engine continues to fuel robust home-buying activity in the province’s largest centre. Calgary is one of few markets in the country reporting an increase in home sales in 2022, with the number of properties sold climbing by just over seven percent, while prices rose close to five percent year-over-year. Inventory levels continued to dwindle, falling 21 percent from 2021 levels. Despite higher interest rates, multiple offers are occurring, with the greatest activity reported in the $450,000 to $650,000 range for single-detached homes and $240,000 to $270,000 for condominiums. The rebound in the oil and gas sector has greatly contributed to the overall health of the housing market. Over the past decade, challenges in the resource sector cast a shadow over housing performance throughout the province, which was reflected in the 10-year stats. Average price in the Calgary CMA in Q3 2022 rose just 18.2 percent to $503,450 over the past decade, up from $425,820 during the same period in 2012. The loan-to-value ratio edged up to 74 percent in 2022, up three percent over the 71 percent reported in 2012. The market’s trajectory changed during the pandemic, coming alive as the province’s economic destiny changed course. In-migration has gained momentum in lockstep in recent years, as evidenced by the uptick in population. According to Statistics Canada, Alberta experienced a 2.7 percent increase between the first and fourth quarter, welcoming more than 118,929 people to the province. Buyers from British Columbia and Ontario are arriving almost daily, attracted to the city’s affordable housing stock and well-paying jobs. With Alberta expected to lead the country in terms of economic growth in the year ahead, home-buying activity in Calgary should remain strong for the foreseeable future.

Courtesy RE/MAX Canada

The Calgary Real Estate Board (CREB®) has released its 2023 Forecast Calgary and Region Yearly Outlook Report. The report, which is prepared by CREB® Chief Economist Ann-Marie Lurie, provides a detailed analysis of the economic and housing market trends in Calgary and surrounding areas for the upcoming year.

According to the report, elevated lending rates are expected to weigh on sales in 2023, bringing levels down from the record high in 2022. However, with forecasted sales of 25,921 in 2023, levels are still expected to be higher than the activity reported before the pandemic.

“Higher commodity prices, recent job growth, record high migration and relative affordability are expected to help offset some of the impacts higher lending rates are having on housing demand. At the same time, we are entering the year with low supply levels which are expected to prevent significant price declines in our market,” said Lurie.

Supply levels declined to the lowest levels seen in over a decade as gains in higher price properties did not offset the supply declines occurring in lower-priced homes. This has left our market in a situation where lower-priced properties still face sellers’ market conditions while higher-priced homes are seeing more balanced to buyers' market conditions.

The shift between supply and sales by price ranges is expected to create divergent trends in prices depending on property type and price range. Overall, price declines in the upper end of the market are expected to offset gains reported in the lower ranges, causing an annual decline of less than one percent.

“With much of the pandemic behind us, 2023 reflects more of an adjustment into more typical conditions and a pause on price gains following 12 percent growth in 2022. While other markets in the country are forecasted to see more significant price and sale declines in 2023, Calgary did not face the same gains as those markets, as prices only recovered from the 2014 highs in 2021,” added Lurie.

Click here for the full CREB® 2023 Forecast Calgary and Region Yearly Outlook Report.