The Calgary housing market has sustained lengthy setbacks over the past years. Although Calgary is no stranger to real estate cycles, the most recent downturn is not responding like previous.
Real estate prices and sales in Calgary are falling quickly and rebounding quickly. Sky-high prices, low mortgage rates and a short supply are. Yet to slow things down.
Calgary’s housing market has been pushed into overdrive, setting record after record. Calgary was ranked 47 of the world’s best 100 cities. Homebuyers are happy the prices haven’t changed much in the past years. Over the past three years, more buyers have been priced into the market.
Calgary house prices growth has been accelerating; there has been a wobble in the median value and aggressive and accelerating price growth across Calgary. Calgary’s real estate market has an ever-changing scenery, in which one sector does not consistently respond to external pressure the same as the other.
History of Average Housing Prices in Calgary
Things have never been quiet on Calgary’s housing front. Since its founding in 1883, Calgary has been a growing concern. In the 1960s, the city was binging on house prices, which still exist.
As far back as 1974, a typical home in Calgary cost $40,000 Or about 2.8 times the average household income; now, the typical Calgary home has ballooned and is sold for 547,000, a whopping 6.3 times of the average household income.
As for affordability, with an interest rate of 10.7%, an interest took up 29.5% of a household income compared to nearly 35% In today’s Calgary.
Average Prices of a Home in Calgary
The demand has been robust, making the Calgary housing market undersupplied, causing a further rise in prices.
Sales movement in Calgary has jumped to 80.5% year over year, as a wave of new listings is readily absorbed by continued strong demand in the Calgary housing market.
There were 3,305 sales in February 2022 alone. The number of home listings is also up by 63% since last year, while the inventory level Is 20.4% lower.
The average price of a home in the Calgary housing market is now $547,720, 13% higher than last year. This is the highest average price increase seen since 2016.
Sales are in the surge as listing prices climb, but sales have also been restricted by the lack of supply choice in the market.
The residential benchmark prices have risen nearly 16% higher than last February. Supply in Calgary’s housing market has been decreasing for years.
There’s Competition among Calgary home buyers due to higher sales and lower inventory levels. This year marks a reversal to the past two years, with Calgary home’s average prices higher than the average listing price.
Average Price by Property
A detached home is a typical single-family home. It is a residential building that stands alone and is singly titled or legally a sole unit.
Detached home sector prices have suffered limited supply and demand. Demand has significantly moved upward.
Detached home prices have increased a lot, with the benchmark price reaching $596,400, nearly $50,000 Higher than prices seen at the end of 2021 and over 90,000 higher than February 2021.
Sales growth is currently robust after the first two months in Calgary housing markets. Detached sales prices are at an all-time high.
A semi-detached home is equal to a detached home, except it shares its wall with another house. This pair of homes must make up an independent building, and each should be separately titled or legally two separate units.
The record number of new listings for February resulted in high record sales, which are not helping in easing the pressure in this segment. The months of supply have not dropped to one since 2006.
These conditions led to an increase in prices; the average semi-detached price has increased by eight 8% to an average price of $562,390. It also shows a 10% month-over-month increase compared to January 2022.
A townhouse is between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units with land and may be attached to other buildings.
However, like condo apartments, owners typically have to pay co-ownership expenses for maintenance and share basic features with their neighbours.
Average prices have grown by 11% year over year to $366,713 for February 2022. This increase creates a significant 9% monthly growth compared to January 2022’s average townhouse price of $336,638.
This category includes all of the apartments and condominiums. These are residential units with common areas such as hallways, parking lots, stairwells, etc.
They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the land where access is reserved for only one occupant. They can be privately owned units and spaces inside the building.
The condo apartment sector has recorded a surge in sales, reaching a record high for February. The average prices of condo apartments are up 8.5% year over year to $274,133.
The condo segment has not experienced the supply constraints as other property types. If conditions remain this tight, there could be a substantial shift towards price recovery.
Average Housing Prices by Neighbourhood in Calgary
The table below shows the average price of each neighbourhood in Calgary
|Calgary North West||$564,00|
|Calgary City Centre||$516,700|
|Calgary South East||$515,500|
|City of Calgary||$499,400|
|Calgary North East||$401,500|
Calgary Housing Market Forcast – 2022
The surge in sales can be attributed to a rebounding economy; the city’s affordability, lifestyle, listings are pushing buyers to get in before the expected interest rate hike later this year.
Calgary’s relative affordability has attracted out-of-town buyers. Calgary has primarily benefited from an influx of prospective town buyers. Lots of first-time homebuyers have been flooding the Calgary housing market.
There is no agreement among economists on Calgary housing markets; market sentiments and other factors have led to price acceleration and record purchases, even though most economic fundamentals are staggering.
Most notably is the expected high demand and low supply, which will push prices upward.
PWC 2022 Forecast for Calgary Housing Market
The PwC, Real Estate forecast, predicts that solid demand for real estate in Calgary will remain throughout 2022, which will strain detached homes, where supply will stay tight.
PwC prediction shows that migration from larger markets and other provinces will keep demand in the Calgary housing market high.
Demand in Calgary is experiencing the fourth-highest migration rate of all Canadian cities. The influx in order is expected. Average prices in the city are also likely to go upwards. The anticipated increase in price and interest rates might reduce housing sales.
The Calgary Real Estate Board (CERB) Forecast
CERB is expecting the Calgary housing market to see an increase in home sales which will remain above historical levels in 2022, and the more significant issue will be housing supply.
CERB intends to see that sales activity will remain strong but thinks that supply challenges will persist. It will take a lot of time before the Calgary housing markets move into balanced conditions, especially when it comes to the price of homes.
However, if supply and demand balance, it can reduce the upward cost in the housing market.