Calgary Housing Market Forecast
Realtor® with 2% Realty
As the Calgary housing market continues to evolve, understanding its complexities is crucial. This guide offers insights into the trends and expectations shaping the future of Calgary’s real estate.
The Calgary housing market in 2024 is characterized by some mixed signals, influenced by both local economic conditions and global factors. Despite some uncertainties, positive indicators such as population growth, economic resilience, and strong demand in affordable housing segments offer optimism.
Delve deeper into what 2024 may hold for Calgary’s housing market. Covering economic influences, property trends, and Ai predictions, this guide provides comprehensive insights for homeowners, investors, and industry professionals.
Alberta’s economy shows resilience with strong consumer spending and business activity, but showed some signs of weakness in the September jobs data along with sticky inflation. The Calgary housing market is heavily tied to several key provincial economic indicators.
Our AI model integrates seven key provincial economic indicators, most closely linked to Calgary's real estate market, to form an equally weighted index. Although there has been a period of consolidation since mid-2022, this indicator continues to show strength and is exhibiting an upward trend as we approach 2024.
While the overall strength of the labor market is evident, unexpected job losses in September sent mixed signals. It is possible that higher wages in some sectors might be exerting pressure on businesses, leading them to downsize their workforce, focusing on retaining essential workers while letting go of non-essential ones. Interestingly, despite their obvious connection our economic models show little historical correlation between the labour market and Calgary housing market prices or trends.
Nonetheless, the robust demand throughout the economy is expected to maintain the unemployment rate below pre-COVID levels for a significant part of 2024.
Alberta, and especially Calgary, is experiencing significant population growth, which is a key factor driving housing demand in the Calgary real estate market. With all Canadian cities grappling with rising costs, the trend of migration towards more affordable areas is expected to continue in 2024. Furthermore, the Canadian government’s record-high immigration targets are likely to further challenge the already record low inventory levels in the housing market.
City | Market Trend | Avg. Home Price | Detached | Attached | Apartment |
|---|---|---|---|---|---|
Calgary | Increasing | $545,746 | $725,758 | $521,056 | $321,641 |
Vancouver | Balanced | $1,299,503 | $2,236,349 | $1,213,817 | $810,944 |
Winnipeg | Balanced | $369,325 | $399,017 | $314,087 | $259,127 |
Ottawa | Balanced | $660,836 | $810,319 | $517,909 | $465,568 |
Toronto | Decreasing | $1,125,928 | $1,450,112 | $1,042,124 | $708,780 |
Hamilton | Decreasing | $789,040 | $870,085 | $653,523 | $495,705 |
Calgary’s housing market is influenced by global factors such as US policies, international conflicts, and supply chain disruptions. US interest rates have a cascading effect on Canada’s interest rates, thereby impacting our housing market. A weaker Canadian dollar could potentially make our housing market more attractive to immigrants. The US’s significant investment in new Green industries necessitates increased Canadian spending to stay competitive. Additionally, recent global conflicts are leading to increased immigration to Canada, intensifying the demand for affordable housing. The Calgary real estate market continues to be a great fit for immigrants looking for affordability, plus many having their funds in US dollars.
Moreover, supply chain issues, particularly concerning vital resources from China and Russia, are inadvertently boosting Alberta’s economy, which in turn positively affects the Calgary housing market.
The detached real estate market in Calgary is presenting some mixed signals. There is weakness in the higher price segment, specifically the 800k range, while the lower price point remains red hot. The absorption rate has consistently stayed above 70% for 11 consecutive months, signalling a robust market. Furthermore, sales in November-December 2023 demonstrated above-average strength across all metrics.
Historically, a strong fourth quarter often leads to a solid first three months in the new year. Despite experiencing rapid price growth, Calgary continues to be one of Canada’s most affordable cities. Given the supportive economic environment, a 5-15% price appreciation in the detached home market is a realistic prospect for the first quarter of 2024.
Our AI analysis identifies 'days on market' as the most predictive internal metric for forecasting the trajectory of future real estate prices. According to our model's projected trend, the days on market for detached homes are expected to peak in January 2024 and then decrease, dropping below 20 days by March 2024. This trend is anticipated to offer substantial price support for the first quarter of 2024.
The condo real estate market is witnessing rapid price growth, drawing the attention of both local and out-of-province investors, as well as new immigrants seeking affordable housing. Calgary boasts some of the lowest apartment prices among major Canadian cities, coupled with high rental rates, suggesting that condo prices have the potential to increase further if the economic environment remains favorable.
However, unlike detached and non-condo attached homes, condominiums are facing considerable challenges due to rising condo fees. These fees heavily impact a buyer’s purchasing power and potentially cap the prices of certain complexes where the fees have become excessively high.
The prices of new construction homes have experienced a sharp uptick, a trend that is anticipated to persist into 2024, impacting the overall affordability of housing. This increase in prices is supported by tight construction labor and supply market, which has led to rising wages and material costs. Federal government “green” initiatives are also adding significant costs to the construction of new homes, and this trend is expected to accelerate.
Additionally, infills and recent rezoning initiatives driven by the City of Calgary ironically designed to lower prices, are rapidly diminishing affordable housing options. Affordable single-family dwellings are being replaced by high-end multi-family units, typically carrying a price tag that is 30-40% higher than the previously constructed home.
Ten years of historical data highlight the seasonal fluctuations in Calgary's housing demand. Each year, there's a rapid increase in demand during the first quarter, with a peak typically occurring in March. This is followed by a plateau in demand throughout the second and third quarters, and a subsequent decline as the year progresses into the fourth quarter.
Currently Q4 2023 has continued to show price appreciation despite being the lowest demand quarter. Historically strong Q4's have transitioned to a strong Q1.
When assessing Calgary’s real estate inventory levels, it’s important to consider the city’s cumulative inventory growth due to expansion. Naturally, this leads to an increase in listings and sales. However, despite new listings peaking at 2,684 units in October 2023 – a high not seen since 2015 – robust sales have prevented any notable change in inventory levels, which remain over 40% below typical levels for this time of year. The current months of inventory for single detached homes stands at 1.42 months, reflecting very tight market conditions.
This situation is largely a result of the swiftest interest rate hike in Canada’s history, which soared from rates near 1% just over a year ago. This rapid increase has essentially caused Canadian homeowners to hold onto their low mortgages, which are more favorable compared to current rates over 6%. A significant number of these low-interest mortgages are set for renewal during 2024-2025, potentially increasing the housing market’s supply as these terms come to an end.
Economic trends from Q4 2023 suggest that Calgary's real estate market will likely continue to see price appreciation until peak demand is achieved in March 2024, with potential gains ranging from 5-15% across all real estate market segments. Adhering to Calgary's typical seasonal price patterns, the later spring and summer months will provide more insight into future price trajectories. However, our models project that prices may plateau by April 2024 and experience a modest decline for the remainder of the year, though still maintaining higher levels than those seen in 2023. Our projected average benchmark price for 2024 stands at $745,000.
Erick Dillmann
2% Realty Associate | Realtor® | BA Economics
With over 17 years of experience in Calgary’s real estate market and a decade with 2% Realty, Erick combines marketing skill and a passion for client satisfaction. His success is highlighted by winning the Top Platinum Producer award for eight consecutive years.
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