The Canadian housing market showed little change in March 2024, with home sales and prices remaining mostly flat. Sales activity recorded through Canadian MLS systems edged up by 0.5 percent month-over-month but remained below the average of the last 10 years. 

The national composite MLS Home Price Index (HPI) also remained mostly unchanged, dipping by 0.3 percent month-over-month. The report suggests that while there are expectations of a market pick-up this year, the current situation could be influenced by high interest rates and the anticipation of rate cuts.

Canadian consumers are tapped out but buyer’s market potentially on horizon

We’d say it’s more likely this flat market behaviour indicates that the Canadian consumer is tapped out, and with housing at record unaffordability, it’s unlikely we’ll see much growth until affordability returns to the market.

Affordability is a function of price, interest rates and income. According to Bloomberg, to reach pre-COVID affordability in Canada, prices would need to come down 33 percent, incomes would need to rise 55 percent or interest rates would need to fall 350 basis points. 

It’s likely that some combination of these three factors will eventually create a recovery in the Canadian real estate market. 

The data suggests buyers might respond positively to the increase in new properties for sale, which would reduce some excess demand and potentially create a buyer’s market, allowing for negative price discovery to take place. The full impact will be clearer with the release of April’s data.

Transactions

The unadjusted transaction count for March 2023 exhibited a 1.7 percent increase compared to the previous month. This growth was relatively modest when juxtaposed with the preceding two months’ performances. Apparently, the Easter weekend’s sluggish market conditions can be blamed for this subdued growth.

However, when looking at the inability of monthly home sales to return to their 10-year average, it tells us that unaffordability and economic factors are clearly preventing Canadians from buying homes the way they have in the past:

Price

Price activity seemed comparably underwhelming, with prices moving sideways (slightly downward) during the spring market of February and March — two months they almost always move up:

The biggest increases in price were observed in the following locations.

1. Greater Moncton: +5 percent

2. Estrie, Quebec: +3.5 percent

3. Prince Edward Island: +2.7 percent

4. Sault Ste. Marie, Ontario: +2 percent

5. Chilliwack, British Columbia: +1.9 percent

The biggest decreases in price were observed in these locations.

1. Simcoe & District, Ont.: -2.3 percent

2. Mauricie, Que.: -3 percent

3. Halifax: -1.7 percent 

4. B.C.’s Interior region: -1.6 percent

5. Owen Sound, Ont.: -1.2 percent

 

CREA’s 2024 forecast

The Canadian Real Estate Association (CREA) released its quarterly forecast, which indicates a return to the 10-year average sales volume growth trajectory by 2025.

CREA expects interest rates to remain a key factor influencing Canadian housing markets through 2024 and 2025. The market has been noticeably quiet since the Bank of Canada’s rate hikes in 2023, with prices in many markets still well below their historic peaks seen in 2021 and 2022.

Source: CREA

Expectations suggest the first rate cut in 2024 may occur in the second half of the year, with financial markets predicting around 50 basis points of cuts by the end of 2024. Most economists seem to believe that Canada won’t cut until the United States Federal Reserve cuts, which we may not see this year if it doesn’t happen at the next Federal Open Market Committee meeting. 

CREA’s statistics show a bounce in new supply, sales and listings, suggesting the market may be gearing up for a recovery. Around 492,083 residential properties are projected to trade in 2024, a 10.5 percent increase from 2023. The national average home price is forecast to increase by 4.9 percent to $710,468 in 2024.

In 2025, national home sales are expected to climb by 7.8 percent to 530,494 units, while the national average home price is projected to rise by 7 percent to $760,120.

Increases in volume

CREA’s 2024 forecast shows the biggest increase in number of homes sold to take place in:

• Alberta, by 13.6 percent

• Nova Scotia, by 12.7 percent

• Ontario, by 12.6 percent 

• Quebec, by 11 percent

Source: CREA

Increases in price

CREA’s 2024 forecast expects the biggest increase in home prices to be seen in:

• Alberta, by 7 percent to $479,765

• British Columbia, by 6.9 percent to $1,037,382

• Nova Scotia, by 6.7 percent to $451,114

• Quebec, by 5.9 percent to $515,877

Source: CREA

Courtesy REM Magazine, CREA

A public hearing on a proposed bylaw that could change the urban landscape of Calgary starts on Monday when citizens head to council chambers to voice their opinions about a possible citywide zoning change.

The rezoning proposal is a key part of the city's housing strategy, something the city says is an important measure to address housing supply and affordability.

If passed, the bylaw would allow for different housing types, such as six-plexes and townhomes, to be built in neighbourhoods that currently only allow single-family homes.

It's been a hotly debated topic that included an attempt at a plebiscite, separate community meetings with city councillors, a highly-criticized citizen engagement plan and a letter opposing the proposal signed by more than 40 Calgary community association presidents.

In an interview on CBC Calgary's This is Calgary podcast, host Anis Heydari spoke with Chris Welner, the Glendale community association president, about why he thinks rezoning is not the right path.

He was one of those who signed the letter.

City council is about to decide if it wants to make it simpler to knock down a bungalow and build a row house. This could help ease the affordability crunch, and could lead to neighbourhoods that don't look like they were intended to. With emotion on all sides, we hear from a community opposed, and why the city says it's time to get cozy with this blanket.

"I think blanket zoning is really a blunt sledgehammer," said Welner.

"We 100 percent support density development, but it's got to be done properly. It can't just be 'open up the doors to a developer who wants to build on anywhere they want, under any circumstances.'"

According to the City of Calgary, rezoning happens when a property owner wants to develop something other than what's currently allowed under existing zoning. 

"Council makes the final decision on whether to approve or refuse a rezoning application after a public hearing," the city said on its website.

If the rezoning is approved by council, the applicant can submit a development permit application. Depending on the location of the property, development and building permits might still be required — and building permits are always required for new homes.

Speaking on This is Calgary, Josh White, Calgary's director of city and regional planning, said the citywide rezoning proposal is a necessary step toward solving the ongoing housing problems the city faces.

As it stands, White said, around two-thirds of the city's land base is only zoned for single-detached homes and no change can happen. If you want to replace a single-detached home, you'd only be able to do build another house of the same type.

"We've seen rapid rise in rent and price across the city," White said.

"What that [rezoning] does is allow more diversity of housing, so, different varieties of housing to boost our housing supply and provide housing that's more within the reach of more Calgarians."

The proposed citywide rezoning is one of a number of strategies that the city is pursuing. 

While the proposal may be a solution for one problem, Welner worries that in solving this issue, others will come up.

"Calgary is a great city to live in, it's truly a great place. Are there issues, are there problems, absolutely," he said.

"But blanket zoning is going to open up an amazing wealth transfer to developers who have the wherewithal to come in, buy up the house that's probably a little bit run down that's next to you and put up anything."

The citywide rezoning public hearing starts Monday with a decision on the bylaw to come in the following weeks.

Courtesy CBC News

A public hearing on a proposed bylaw that could change the urban landscape of Calgary starts on Monday when citizens head to council chambers to voice their opinions about a possible citywide zoning change.

The rezoning proposal is a key part of the city's housing strategy, something the city says is an important measure to address housing supply and affordability.

If passed, the bylaw would allow for different housing types, such as six-plexes and townhomes, to be built in neighbourhoods that currently only allow single-family homes.

It's been a hotly debated topic that included an attempt at a plebiscite, separate community meetings with city councillors, a highly-criticized citizen engagement plan and a letter opposing the proposal signed by more than 40 Calgary community association presidents.

In an interview on CBC Calgary's This is Calgary podcast, host Anis Heydari spoke with Chris Welner, the Glendale community association president, about why he thinks rezoning is not the right path.

He was one of those who signed the letter.

LISTEN | Glendale Community Association President Chris Welner says "a more surgical approach" would be a better approach to tackle Calgary's housing crisis:

"I think blanket zoning is really a blunt sledgehammer," said Welner.

"We 100 per cent support density development, but it's got to be done properly. It can't just be 'open up the doors to a developer who wants to build on anywhere they want, under any circumstances.'"

According to the City of Calgary, rezoning happens when a property owner wants to develop something other than what's currently allowed under existing zoning. 

"Council makes the final decision on whether to approve or refuse a rezoning application after a public hearing," the city said on its website.

If the rezoning is approved by council, the applicant can submit a development permit application. Depending on the location of the property, development and building permits might still be required — and building permits are always required for new homes.

Speaking on This is Calgary, Josh White, Calgary's director of city and regional planning, said the citywide rezoning proposal is a necessary step toward solving the ongoing housing problems the city faces.

As it stands, White said, around two-thirds of the city's land base is only zoned for single-detached homes and no change can happen. If you want to replace a single-detached home, you'd only be able to do build another house of the same type.

"We've seen rapid rise in rent and price across the city," White said.

"What that [rezoning] does is allow more diversity of housing, so, different varieties of housing to boost our housing supply and provide housing that's more within the reach of more Calgarians."

The proposed citywide rezoning is one of a number of strategies that the city is pursuing. 

While the proposal may be a solution for one problem, Welner worries that in solving this issue, others will come up.

"Calgary is a great city to live in, it's truly a great place. Are there issues, are there problems, absolutely," he said.

"But blanket zoning is going to open up an amazing wealth transfer to developers who have the wherewithal to come in, buy up the house that's probably a little bit run down that's next to you and put up anything."

The citywide rezoning public hearing starts Monday with a decision on the bylaw to come the following weeks.

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

The Bank expects the global economy to continue growing at a rate of about 3%, with inflation in most advanced economies easing gradually. The US economy has again proven stronger than anticipated, buoyed by resilient consumption and robust business and government spending. US GDP growth is expected to slow in the second half of this year, but remain stronger than forecast in January. The euro area is projected to gradually recover from current weak growth. Global oil prices have moved up, averaging about $5 higher than assumed in the January Monetary Policy Report (MPR). Since January, bond yields have increased but, with narrower corporate credit spreads and sharply higher equity markets, overall financial conditions have eased.

The Bank has revised up its forecast for global GDP growth to 2¾% in 2024 and about 3% in 2025 and 2026. Inflation continues to slow across most advanced economies, although progress will likely be bumpy. Inflation rates are projected to reach central bank targets in 2025.

In Canada, economic growth stalled in the second half of last year and the economy moved into excess supply. A broad range of indicators suggest that labour market conditions continue to ease. Employment has been growing more slowly than the working-age population and the unemployment rate has risen gradually, reaching 6.1% in March. There are some recent signs that wage pressures are moderating.

Economic growth is forecast to pick up in 2024. This largely reflects both strong population growth and a recovery in spending by households. Residential investment is strengthening, responding to continued robust demand for housing. The contribution to growth from spending by governments has also increased. Business investment is projected to recover gradually after considerable weakness in the second half of last year. The Bank expects exports to continue to grow solidly through 2024.

Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026.

CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs. Core measures of inflation, which had been running around 3½%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2½% in the second half, and reach the 2% inflation target in 2025.

Based on the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months. The Council will be looking for evidence that this downward momentum is sustained. Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 5, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 24, 2024.

Courtesy Bank of 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 was recognized as a Diamond Team for 2023

This distinction was only achieved by four teams at RE/MAX Real Estate (Central), in addition, the Viani Real Estate Group ranked as the 54th top-producing team in all of RE/MAX Western Canada an area which spans from Manitoba to British Columbia.

The Viani Real Estate Group helped over 140 friends, families, businesses and investors achieve their real estate goals in 2023. Through the diverse skill set of our group, we were able to assist clients with their residential, commercial and rural needs. 

In addition, RE/MAX Real Estate (Central) was recognized as the #1 RE/MAX office worldwide for the 26th year, the Viani Real Estate Group congratulates RE/MAX Real Estate (Central) and is proud to be associated with such an outstanding office.

Individually the group members were recognized with the following RE/MAX awards;
- Alison Lang | Platinum Club
- Nga Jenna Nguyen | 100% Club
- Tom Armstrong | 100% Club
- Greg Keogh | Executive Club

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 put our award-winning service to work for you.

Best Wishes
www.vianigroup.com
Viani | Lang | Nguyen | Armstrong | Keogh

MARCH 2024 HOUSING MARKET UPDATE

April 1, 2024

March reflects strong seller's market and price increases

March sales rose to 2,664 units, a 10 per cent year-over-year gain and much higher than long-term trends. While new listings did pick up over last month, the 3,172 units were still below what we typically see in March and not enough relative to sales to drive any change in the supply situation. In March, the sales-to-new listings ratio rose to 84 per cent, and the months of supply fell below one month. 

“We have not seen March conditions this tight since 2006, which is also the last time we reported high levels of interprovincial migration and a months-of-supply below one month," said Ann-Marie Lurie, Chief Economist at CREB®. “Moreover, we are entering the third consecutive year of a market favouring the seller as the two-year spike in migration has driven up demand and contributed to the drop in re-sale and rental supply. Given supply adjustments take time, it is not a surprise that we continue to see upward pressure on home prices.” 

Inventory levels have declined across properties priced below $1,000,000, with the steepest declines occurring for homes priced below $500,000. In March, there were 2,532 units in inventory, 22 per cent lower than last year and half the levels we traditionally see in March.

In March, the unadjusted total residential benchmark price rose to $597,600, a two per cent gain over last month and nearly 11 per cent higher than last year. Prices have increased across all property types, with the most significant year-over-year gains occurring for the relatively more affordable row and apartment-style homes.   

Detached

Detached home sales rose in March but were likely limited by the level of new listings coming onto the market. New listings in March were 1,386 units, compared to the 1,151 sales, causing the sales-to-new listings ratio to rise to 83 per cent. Inventories also remained relatively stable compared to last month but were 24 per cent lower than last year’s levels and nearly 60 per cent lower than long-term trends for March. Inventory levels dropped across all price ranges, but the most significant fall was in the lower price point. Overall, 71 per cent of the available inventory in March was priced above $700,000.

 

Low inventories compared to sales caused the months of supply to drop below one month, driving further price gains. The unadjusted detached benchmark price rose to $739,700, a monthly gain of nearly three per cent and a year-over-year gain of 14 per cent. The largest year-over-year gains occurred in the most affordable North East and East districts.

 

Semi-Detached

Supply availability continues to weigh on the semi-detached sector of the market. In March, 260 new listings were met with 250 sales, causing the sale-to-new listings ratio to rise to 96 per cent. This prevented inventories from improving, and the months of supply dropped below one month. Inventory declines have been driven mainly by properties priced below $600,000.

 

Limited supply and growing demand drove further price gains in March. The unadjusted benchmark price reached $658,000, nearly three per cent higher than last month and a 14 per cent gain over last March. Prices rose across all districts in the city, with year-over-year gains ranging from a low of 11 per cent in the highest-priced area of the City Centre to 25 per cent in the lowest-priced market in the East district.

 

Row

Both sales and new listings rose in March. However, with 536 new listings and 449 sales, the sales-to-new listings ratio rose to 84 per cent, preventing any significant monthly change in inventory levels. With 355 units available, inventory levels were 12 per cent below last year’s and 53 per cent below long-term trends for March. The decline in inventory levels was driven by properties priced below $400,000, as inventory levels rose 35 per cent for units priced above $400,000.

 

The unadjusted benchmark price trended up in March, reaching $448,700, a monthly gain of nearly three per cent and over 20 per cent higher than levels reported at this time last year. The higher-priced City Centre reported the slowest growth in benchmark prices, with the highest growth reported in the city's most affordable districts.

 

Apartment Condominium

Sales in March reached 814 units, contributing to the first quarter’s record-high sales of 1,940 units, nearly 31 per cent higher than last year. New listings also improved throughout the first three months of the year, but with a March sales-to-new-listings ratio of 82 per cent and a months-of-supply of one month, conditions favoured apartment condominium sellers.

 

Demand for lower-priced homes has supported the growth of apartment-style properties, but the tight conditions have also contributed to further price gains. In March, the benchmark prices reached $337,700, over two per cent higher than last month and 17 per cent higher than levels reported last March.

 REGIONAL MARKET FACTS

Airdrie

March reported 203 sales and 218 new listings. While both new listings and sales improved, with a sales-to-new listings ratio of 93 per cent, inventory levels were 22 per cent below last year and 56 per cent below typical March levels.

 

With less than one month of supply, it is not surprising that we continue to see upward pressure on home prices. In March, the benchmark price reached $540,400, a monthly gain of two per cent and a year-over-year increase of over nine per cent. Prices improved across all property types, with stronger year-over-year gains for the relatively lower-priced row and apartment-style products.

 

Cochrane

Following a slower start to the year, sales in March rose to nearly the same level of new listings coming onto the market, pushing the sales-to-new listings ratio up to 99 per cent. This also contributed to further declines in inventory levels, and the months of supply dropped to just over one month.

 

As of March, the total residential benchmark price reached $555,300, a monthly gain of over one per cent and a year-over-year increase of nearly 12 per cent. Prices rose across all property types, and detached prices pushed above $650,000 for the first time.

 

Okotoks

Okotoks continues to struggle with supply as the 71 new listings that came on the market this month were met with 65 sales, preventing any improvement in inventory levels. There were only 54 units available in March, a year-over-year decline of 10 per cent and nearly 70 per cent below long-term trends for the month.

 

Limited supply and strong sales caused the months of supply to fall below one month, and March was the lowest March reported since 2006. Persistently tight conditions drove further price growth this month, as the total residential benchmark price rose to $610,700, a monthly gain of one per cent and a year-over-year increase of nine per cent. Prices have been rising for all property types, with the most significant year-over-year gains occurring for semi-detached and row properties. 

 

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

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

Anyone expecting smooth sailing ahead for the housing market got a reality check in February. Month-to-month drops in home resales in several of Canada’s major markets were a reminder that very challenging affordability conditions still heavily constrain many buyers—despite emerging signs of a market turnaround in the previous two months. Reports from local real estate boards showed February’s backsteps partly reversed advances made at seasonal low points in December and January.

Some of these reports also revealed a rise in sellers entering the market. This was the case in Vancouver, the Fraser Valley, Edmonton, Hamilton and Montreal, where we estimate new listings increased between 3% and 14% from January. We suspect sellers who took a pass in the fall may have taken an early jump on the upcoming spring market, warmed by news of busier activity in December and January. Demand-supply conditions generally eased across the country last month though remained balanced in most of Canada, with several Prairies markets still strongly favouring sellers.

And yet, home prices picked up (slightly) in all major markets—perhaps marking a turning point. The MLS Home Price Index in Toronto, for instance, rose month over month for the first time in seven months. The earlier tightening in demand-supply conditions in December and January no doubt gave sellers more sway in setting prices. We think a vigorous, sustained recovery won’t take shape until interest rates fall more meaningfully—something we peg for the second half of 2024.

Calgary — Still solid despite some volatility

The Calgary market is easily the busiest—and hottest—in the country but its pace slowed down in February. We estimate home resales fell 8% m/m, reversing the prior two months’ gains. We don’t think the development signals anything other than normal month-to-month volatility. Resales still stand more than 60% above pre-pandemic levels. Housing demand remains exceptionally strong in the area, fueled by tremendous population growth. The sharp loss of affordability during the pandemic no doubt pinches many potential buyers though with demand-supply conditions so tight, many more are clearly in the game. Calgary prices are up the most over the past year among the markets we track. The rise in the MLS HPI clocked in 10.3% y/y February, little changed from the prior three months. We expect this stable trend to persist in the near term.

Courtesy RBC

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

Global economic growth slowed in the fourth quarter. US GDP growth also slowed but remained surprisingly robust and broad-based, with solid contributions from consumption and exports. Euro area economic growth was flat at the end of the year after contracting in the third quarter. Inflation in the United States and the euro area continued to ease. Bond yields have increased since January while corporate credit spreads have narrowed. Equity markets have risen sharply. Global oil prices are slightly higher than what was assumed in the January Monetary Policy Report (MPR).

In Canada, the economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential. Real GDP expanded by 1% after contracting 0.5% in the third quarter. Consumption was up a modest 1%, and final domestic demand contracted with a large decline in business investment. A strong increase in exports boosted growth. Employment continues to grow more slowly than the population, and there are now some signs that wage pressures may be easing. Overall, the data point to an economy in modest excess supply.

CPI inflation eased to 2.9% in January, as goods price inflation moderated further. Shelter price inflation remains elevated and is the biggest contributor to inflation. Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3% to 3.5% range, and the share of CPI components growing above 3% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3% during the first half of this year before gradually easing.

Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is April 10, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Courtesy of the Bank of Canada

FEBRUARY 2024 HOUSING MARKET UPDATE

March 1, 2024

Low inventory and high demand drive price gains in February

New listings continued to rise in February, reaching 2,711 units. However, the rise in new listings supported further growth in sales, which increased by nearly 23 per cent compared to last year for a total of 2,135 units. The shift in sales and new listings kept the sales-to-new listings ratio exceptionally high at 79 per cent, ensuring inventories remained near historic lows. Low supply and higher sales caused the months of supply to fall to just over one month, nearly as tight as levels seen during the spring of last year.

 

“Purchasers are acting quickly when new supply comes onto the market, preventing inventory growth in the market," said Ann-Marie Lurie, Chief Economist at CREB®. “It is this strong demand and low supply that continues to drive price gains in Calgary. The biggest supply challenge is for homes priced under $500,000, which saw inventories fall by 31 per cent compared to last February. At the same time, we are starting to see supply levels rise for higher priced homes supporting more balanced conditions in the upper end.”

 

In February, the unadjusted detached benchmark price was $585,000, an over two per cent gain compared to last month and over 10 per cent higher than levels reported at this time last year. Our most affordable East district is experiencing the highest year-over-year price growth at 25 per cent, while the relatively better-supplied City Centre has reported the slowest price growth in the city at under five per cent.

Detached

In February, 1,195 new listings came onto the market, of which 75 per cent were priced over $600,000. While new listings did improve over last month in line with seasonal expectations, levels are still below typical levels for February. At the same time, sales in February rose to 954 units, a year-over-year gain of 20 per cent. The growth in sales was driven by where we saw listings growth, but with a sales-to-new listings ratio of nearly 80 per cent, inventory levels were near record lows for February.

 

Exceptionally tight market conditions drove further price growth. In February, the unadjusted detached benchmark price rose to $721,300, nearly three per cent higher than last month and over 13 per cent higher than last February. While prices rose across every district, the most significant year-over-year gains occurred in the North East and East districts.

 

Semi-Detached

Last month’s rise in listings compared to sales was short-lived, as the 223 new listings this month were met with 191 sales, driving up the sales-to-new-listings ratio to 86 per cent. This prevented any significant change to the low inventory situation and caused the months of supply to fall to just over one month.

 

In February, the unadjusted benchmark price reached $639,100, a monthly gain of over two per cent and 13 per cent higher than last year. Year-over-year price gains ranged from a low of 10 per cent in the City Centre to over 26 per cent in the East district.

 

Row

New listings rose to 457 units in February, contributing to the year-to-date increase in new listings of 22 per cent. The rise in new listings supported sales growth, preventing any significant change to the low inventory situation. For the second consecutive month, the months of supply were below one month.

 

The exceptionally tight market conditions have contributed to strong price growth for row properties. In February, the unadjusted detached price reached $436,500, over 2 per cent higher than last month and nearly 19 per cent higher than levels reported last February. Prices rose across all districts, with the highest growth occurring in the most affordable districts.

 

Apartment Condominium

Sales in February reached 638 units, contributing to the year-to-date sales increase of 39 per cent. Relative affordability has supported the strong demand for apartment-style homes, and sales growth has been possible thanks to the continued growth in new listings. Inventory levels trended up over the last month in line with seasonal expectations. However, inventory levels declined by 12 per cent compared to last year, ensuring the market continued to favour the seller with just over one month of supply.

 

Persistently tight conditions continued to place upward pressure on home prices. Prices have steadily increased since January of last year, and as of February, they reached $329,600, a 17 per cent gain over last February. Prices rose across every district in the city, with year-over-year gains surpassing 19 per cent in all districts except the City Centre, which reported a year-over-year gain of 13 per cent.

 

REGIONAL MARKET FACTS

Airdrie

New listings in Airdrie improved in February. However, with 182 new listings and 135 sales, the sales-to-new listings ratio remained high, and inventory levels eased over last year's low levels. Inventory levels are half what we typically see in February and have not been this low since 2006.

 

The rise in sales compared to inventory levels caused the months of supply to drop to just over one month. Airdrie has struggled with limited supply over the past several years, driving home prices. In February, the unadjusted benchmark price reached $529,700, over one percent higher than last month and 10 per cent higher than the $479,700 price reported last February.

 

Cochrane

New listings rose to 105 units in February, the highest monthly total seen since July last year and contributing to the year-to-date gain of 22 per cent. At the same time, February sales improved over last year, with 65 sales.

 

With a sales-to-new listings ratio of 62 per cent, we did see some growth in inventory levels compared to last year. However, inventories remain well below what is typical for this market. Nonetheless, the months of supply remained relatively low for this market at two months, supporting further price growth in the town. As of February, the unadjusted benchmark price reached $548,300, an improvement over last month and over 11 per cent higher than levels reported last year.

Okotoks

For the second month in a row, new listings improved in Okotoks compared to last year. However, as sales also improved over the past two months, inventory levels in February remained stable compared to last month and only slightly higher than last year’s levels.  Inventory levels are near record lows for the month and are 63 per cent below long-term trends.

 

Okotoks has struggled to add enough supply to keep pace with demand, keeping conditions tight and driving home prices. As of February, the unadjusted benchmark price reached $605,500, nearly three per cent higher than last month and a 10 per cent gain over last year at this time.

 

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

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

JANUARY 2024 HOUSING MARKET UPDATE

February 1, 2024

January sees strong sales fueled by boost in new listings

January sales rose to 1,650 units, a significant gain over last year's levels and long-term trends. The growth was possible thanks to a rise in new listings totalling 2,137 units in January. New listings rose for homes priced above $300,000, but the largest gains occurred for homes priced above $700,000.

The rise in new listings relative to sales did little to change the low inventory situation in the city.  With 2,150 units in inventory, levels are near the January record lows set in 2006 and are nearly 49 per cent below the long-term average for the month.

"Supply challenges have been a persistent problem since last year. This month's gain in new listings has helped provide options to potential purchasers, supporting sales growth. However, the growth in sales prevented any significant adjustments in supply, keeping conditions tight and supporting further price growth," stated Ann-Marie Lurie, Chief Economist at CREB®. 

The months of supply in January was 1.3 months, falling over last month's and last year's levels. The persistent tightness in the market contributed to further upward pressure on home prices. The unadjusted benchmark price in January reached $572,300, a gain over last month and ten per cent higher than levels reported last January.

Detached

A boost in new listings helped support stronger sales this month. However, with a sales-to-new-listings ratio of 77 per cent, there was minimal change in the low inventory situation reported in the detached sector. New listings rose for all homes priced above $500,000, but the largest gains occurred in the over $700,000 market segment. Low inventory levels compared to sales prevented any improvement in the months of supply, which at 1.4 months was lower than levels reported last month and last January. 

The exceptionally tight market conditions continued to drive further price growth. In January, the unadjusted detached price reached $702,200, nearly one per cent higher than last month and nearly 13 per cent higher than prices reported last year. Year-over-year price gains ranged from a low of 10 per cent in the City Centre and South East districts to a 27 per cent gain in the East district of the city.

 

Semi-Detached

With 223 new listings and 131 sales, the sales-to-new listings ratio fell to 59 per cent, the lowest level reported since 2020 and significantly improved over the 82 per cent average reported in 2023. The sudden shift did cause inventories to improve over the last month, but they remain well below long-term trends.

The unadjusted benchmark price in January was $625,000, slightly lower than last month but over 11 per cent higher than last January. The monthly decline was driven mainly by adjustments in the higher-priced districts of the West and City Centre.

 

Row

Like other property types, new listings and sales rose in January over levels reported last month and last year. However, with 322 new listings and 297 sales, the sales to new listings ratio remained exceptionally high at 92 per cent. This contributed to further reductions in inventory levels, and the months of supply once again fell below one month.

Limited supply and strong demand contributed to a rise in prices. In January, the unadjusted benchmark price reached $426,400, up over last month and nearly 20 per cent higher than levels reported in January 2023. While year-over-year prices are higher in every district, the West and City Centre districts saw unadjusted benchmark prices ease slightly over December.

 

Apartment Condominium

Apartment-style properties continued to see the most significant gain in sales activity, rising to 488 sales in January, a year-over-year increase of 54 per cent. This was possible thanks to the growth in new listings. However, the gain in listings did little to supply levels; with 682 units, inventories were 40 per cent below long-term trends.

Tight market conditions continued to contribute to further price gains. In January, the unadjusted benchmark price reached $324,000, nearly one per cent higher than last month and 19 per cent higher than last January. Prices rose across all districts, with the largest year-over-year gains occurring in the most affordable districts of the North East and East. 

 

REGIONAL MARKET FACTS

Airdrie

Stronger detached and row sales were enough to offset pullbacks in the semi-detached and apartment sectors, causing total residential sales to increase over levels reported last January. This, in part, was possible thanks to a boost in new listings. However, the boost in new listings and sales prevented any significant shift in inventory levels, which was half of the levels typically seen in the market. 

While conditions remained tight, the unadjusted benchmark price remained stable over the last month but was nearly 10 per cent higher than levels reported in January 2023. The most substantial price gains have occurred for apartment-style homes, which are the most affordable property type. 

 

Cochrane

Eighty-three new listings and 70 sales occurred in January, keeping the sales to new listings relatively high at 84 per cent. This prevented any significant change in inventory levels compared to last month but caused the months of supply to fall below two months once again. The drop in the months of supply is a shift over the last four months, where the months of supply was over two months. 

Despite recent tightening, the unadjusted benchmark price did ease slightly over last month’s levels. Overall, the unadjusted benchmark prices across all property types remained over 10 per cent higher than last January.

Okotoks

Both sales and new listings rose in January compared to last month's and last year’s levels. This caused the sales to new listings ratio to fall to 75 per cent, which was still relatively high but an improvement over the 86 per cent average reported last year. Nonetheless, the sudden gain in new listings was insufficient to cause material changes to the low inventory levels.

With just over one month of supply, conditions remain tight in Okotoks, driving prices up. In January, the benchmark price reached $589,600, higher than last month's and year’s levels. Year-over-year price growth occurred across all property types, with gains ranging from a high of 15 per cent for row properties to a low of six per cent for apartment-style homes.

 

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Rising lending rates have had a notable impact on the housing sector, prompting potential buyers to search for more affordable housing options. Simultaneously, some potential sellers have refrained from listing their homes to avoid the consequences of higher rates. The decrease in new listings at lower price points has likely hindered overall sales activity, particularly as lower-priced properties contributed to declines in sales during 2023. Despite a moderation from record-high levels, strong migration growth and a robust labour market have kept sales well above long-term trends. 

While international migration has influenced rental markets, resulting in increased rental gains and heightened demand from investors, interprovincial migration from higher-priced markets in British Columbia and Ontario has helped support sales growth in the higher price ranges of our market, even in the face of higher lending rates. Moving into 2024, we anticipate that potential buyers who were previously on the sidelines due to limited supply choices may reenter the market as lending rates ease and listings improve. 

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Looking ahead to 2024, migration is expected to slow, but remain robust enough to sustain relatively strong sales in our market.

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At the same time, with more mortgages set to renew, we could see some gains in resale listings as existing homeowners who were previously hesitant to change their housing situation may be motivated to capitalize on rising prices and favourable seller market conditions. The combination of improved listings and heightened activity in the new home sector is anticipated to foster some growth in overall supply. However, given the persistent strong demand driven by recent migration and a healthy job market, it will take time for supply levels to rise sufficiently to restore balance to the market. 

Although conditions are not expected to be as tight as in 2023, a seller’s market is projected to persist throughout the spring market, resulting in further price growth. However, the rate of growth for each property type is anticipated to slow compared to 2023 levels. Supply growth is expected to be mostly driven by the upper price ranges for each property type, which will likely decelerate the pace of price growth for higher-priced properties. Meanwhile, conditions are expected to remain tight for lower-priced properties, contributing to continued price gains.

Courtesy Calgary Real Estate Board.

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