The Calgary housing market miraculously succeeded in balancing affordability with conservative growth throughout the course of the pandemic. But the city might be joining its other major urban counterparts, as Calgary’s housing sector sizzles.
It was no secret that Calgary was late to the red-hot pandemic-era nationwide real estate boom. The coronavirus public health crisis and the collapse in energy prices posed challenges to the Alberta real estate market overall. But times have changed as more people see opportunities in this dynamic Western Canada city,
And while Calgary once served as an affordable alternative for prospective homeowners, recent price and sales growth have caused the housing market to heat up. So, in a rising-rate environment and oil prices trading at their highest levels in eight years, might the Calgary housing market about to boom?
The answer to that question may rest in the market data. Let’s look at how a hot 2021 wrapped up, and what could lie ahead.
Prices Continued to Climb in the Heated Calgary Housing Market
According to the Calgary Real Estate Board (CREB), residential sales surged 44.9 per cent in December 2021 on a year-over-year basis, totalling 1,737 units. The strong performance in December added to the record year for the Calgary housing market, with sales activity soaring close to 72 per cent, to 27,686 units in 2021.
The total residential sales price advanced at an annualized rate of 10.1 per cent to $463,900. All property types witnessed exceptional gains to finish the year:
- Detached: +11.9% to $547,300
- Semi-Detached: +9.9% to $432,400
- Townhome: +7.4% to $300,100
- Apartment: +2.9% to $252,00
Last year, the total benchmark price climbed a little more than eight per cent to $451,567, short of the annual record in 2015.
Supply became an important factor for Calgary real estate in December.
New residential listings rose 4.9 per cent year-over-year to 1,230 units. Active residential listings tumbled 29 per cent to 2,608 units. The months of inventory, which measures the number of months it would take to exhaust current supply of listings at the present level of sales activity, declined 51 per cent to 1.5.
“Concerns over inflation and rising lending rates likely created more urgency with buyers over the past few months. However, as is the case in many other cities, the supply has not kept pace with the demand, causing strong price growth,” said CREB® Chief Economist Ann-Marie Lurie in a news release.
CREB warns that the Calgary real estate market can expect some of the tightest conditions on record this year, something that could accelerate the city’s housing prices and diminish its affordability status.
But the positive trend is that more supply is coming online as new housing construction intensifies.
According to Canada Mortgage and Housing Corporation (CMHC), housing starts soared 103 per cent year-over-year to 2,192 units in November. In the first 11 months of 2021, housing starts increased 65.1 per cent to 13,862 units compared to the same period in 2020.
But how did the surrounding areas perform in December on a year-over-year basis?
Airdrie
- Sales: +30.3% to 116
- Price: +13.2% to $398,100
- Active Listings: -62.7% to 82 units
- Months of Supply: -71.4% to 0.71
Cochrane
- Sales: +5.9% to 72
- Price: +9.5% to $460,300
- Active Listings: -60% to 60 units
- Months of Supply: -62.2% to 0.83
Okotoks
- Sales: +17.5% to 47
- Price: +5.9% to $476,300
- Active Listings: -39.7% to 38 units
- Months of Supply: -48.7% to 0.81
Unlike Toronto and Vancouver, Calgary is retaining young professionals and attracting young first-time homebuyers from other big cities across Canada.
Will 2022 Repeat This Performance?
While Calgary is experiencing an exceptional housing boom, the Canadian real estate market is forecast to balloon more than nine per cent this year. In Calgary, housing prices are forecast to grow 2.5 per cent to $506,685, with the number of sales estimated to jump four per cent, according to the 2022 Canadian Housing Market Outlook Report.
With a rebounding economy, a resurgence in the oil and gas sector, and more Canadians trying to find more affordable housing options, experts say that Calgary is one of the few remaining large markets with price tags that won’t send your budget spinning.
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