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It’s no secret that Calgary has been Canada’s top real estate market so far in 2023, but what remains a mystery is its performance in the new year.
Yet two new market forecasts are shedding light about what lies ahead here and across Canada. Re/Max Canada issued its 2024 Housing Outlook last month, showing every major market has seen year-over-year sales declines. That includes Calgary, down 12 per cent between Jan. 1 and Oct. 31.
The forecast, however, for Calgary was, well, cloudy as Re/Max failed to include the city in its predictions for 2024.
That said, local realtors are upbeat, says Chris Alexander, president of Re/Max Canada.
“Realtors we talk to in the city are pretty adamant in their belief that we will continue to see a strong market to finish the year and into 2024,” especially if mortgage rates remain level or even fall slightly as predicted in the report, he says.
While Re/Max did not provide price and sales predictions for Calgary, it did for other major cities, including Vancouver.
There, the average price gained about four per cent year over year as of Oct. 31 to about $1.498 million, despite sales falling about 15 per cent.
For 2024, Re/Max forecasts Vancouver sales will continue declining, ending 2024 about three per cent lower than in 2023.
Yet, like in 2023, the average price is expected to climb, reaching more than $1.5 million — roughly a two per cent rise.
Re/Max wasn’t the only organization making predictions; the Calgary Real Estate Board also recently issued its third-quarter update, which included a mini-forecast for 2024. (CREB’s full 2024 forecast will be released in January.)
CREB statistics show that, as of Sept. 30, the benchmark price of a home was $569,567, up more seven per cent year over year.
As well, sales were up year-to-date more than 24 per cent from the same period in 2022.
The big driver for resale real estate has been Calgary’s economy, buoyed by the energy sector, the report notes.
The report also points to high migration as a demand driver with more than 74 per cent of the roughly 45,000 interprovincial migrants to Alberta in the third quarter coming from British Columbia and Ontario.
Like the Re/Max forecast, the CREB report stopped short of predicting the average price for 2024, but it predicted modest growth, likely superior to pre-pandemic years, says CREB chief economist Ann-Marie Lurie.
“The big question is whether migration from larger markets that has driven demand will continue,” she says, noting this has propelled home price and rent growth.
“Generally, when migrants are coming from these higher priced markets, they are less concerned about prices opposed to local buyers.”
For example, migrants from Vancouver are less price sensitive, given Calgary’s benchmark price for a single-family detached home is about $694,000.
Although up about 10 per cent year over year, the price remains less than half the average cost of a Vancouver home.
Still, affordable single-family detached homes are increasingly rare, leaving many first-time local buyers to look to condominiums, which have a benchmark price of about $309,000, up about 14 per cent year over year.
“Our apartment condo sector has been doing really well — finally,” she says.
Yet what could really determine the direction of the market in Calgary and across Canada are borrowing costs.
“There have been a lot of people who haven’t made a move because of the higher rates.” Lurie further notes that could change in 2024.
“There is the expectation that rates aren’t going to stay as high as they’ve been.”