Strong Gains Reported in Medicine Hat Real Estate Market

The Canadian real estate market is seeing unprecedented activity in every type of market, from major urban centres, to larger suburban towns, to small rural communities. Sales activity is soaring, residential prices are skyrocketing, and demand continues to outpace supply. The Medicine Hat real estate market is no exception to this trend, witnessing substantial gains in transactions and valuations.

The Medicine Hat real estate market has advanced over the years, attracting plenty of homebuyers from Edmonton and Calgary, as well as households from nearby provinces. But Medicine Hat has not seen the average price for a home approach the $400,000 mark. Whether this is sustainable or not remains to be seen in the post-coronavirus economic recovery, particularly if the Bank of Canada (BoC) raises interest rates before other G7 nations. That said, homeowners are taking advantage of current conditions and cashing in properties they might have purchased at a fraction of the price.

So, how impressive was the Medicine Hat real estate market in March? Based on the latest data, it’s safe to say that this Alberta city is in for a busy spring season ahead.

Strong Gains Reported in Medicine Hat Real Estate Market

According to the Medicine Hat Real Estate Board (MHREB), residential sales soared an impressive 101 per cent year-over-year in March, totaling 141. Most of the gains were concentrated in detached homes, but semi-detached and apartments reported 14 per cent and 160 per cent growth, respectively.

Price growth was seen across the board in the Medicine Hat housing market. The total residential average price climbed 19.4 per cent year-over-year to $353,741. Here were the numbers for the various property types in the Albertan municipality’s real estate market:

  • Detached: +21.7% to $389,046
  • Semi-Detached: +13.3% to $305,488
  • Townhome: +4.9% to $181,486
  • Apartment: +12.8% to $169,308

Like other major housing markets nationwide, inventory remained a crucial issue for Medicine Hat.

New listings climbed at an annualised rate of 41.7 per cent to 221. Active listings dropped 22.5 per cent to 433. Months of stocks plummeted 61.5 per cent to 3.07.

Overall, inventory levels are cratering for nearly all property types. Detached properties plunged 24 per cent, semi-detached houses crashed 44 per cent, and apartment units slumped 15 per cent.

But supply constraints could ease over the next year as housing starts have increased, according to the latest numbers from the Canada Mortgage and Housing Corporation (CMHC). In February, housing starts hit 9, up from two in the previous year. Completions decreased, from 53 in February 2020 to just two in February 2021.

What is Driving the Medicine Hat Real Estate Market?

The Canadian real estate market is benefiting from historically low interest rates that are supporting demand volumes nationwide. With rates near zero, homebuyers are borrowing more and can outbid other homebuyers. The same trend is unfolding in the southern Alberta town as a blend of move-up and out-of-town buyers scoop up limited inventories. As demand continues to outpace supply, Medicine Hat and the long list of other housing markets will continue to see a boost in real estate prices, whether it is for a three-bedroom detached or a one-bedroom condominium.

The Triumphant Return of the Alberta Economy

After maintaining one of the most lackluster real estate markets in the country, Alberta is once again reporting growth. From Edmonton to Calgary to Red Deer, the western province’s housing sector is finally in the recovery stage. This comes months after nearly every housing market country-wide posted record gains.

But industry experts are warning that policy proposals of cooling a red-hot real estate market nationwide could have unintended consequences for Alberta. Many point to the fact that the benchmark price of a home was $431,100 in February, approximately five per cent lower than in 2014, when the same benchmark was roughly $453,000.

Some of the recommendations include tightening lending standards, applying stress tests on mortgages, and increasing supply. While this might be beneficial for a soaring market like Toronto or Vancouver, demand-side solutions might hinder the recovery Alberta’s housing market.

Moreover, the Alberta economy has entered the recovery phase, too, thanks to a mix of bullish trends. Greater investment, a booming housing sector, rising energy prices, and skyrocketing lumber and agricultural sectors – Alberta has certainly started 2021 on a high note!

“We’ve gone through such a harsh year but we’ll see a big rebound in 2021,” said Dr. Jack Mintz, the chair of Alberta’s Economic Recovery Council, in an interview with the Calgary Herald. “That’s because there are various trends already happening. We’re having one of the best years for wheat prices and the cattle market is back . . . and we’re also seeing a boom in high-tech.”

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