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Calgary’s Real Estate Market

All real estate markets have trends.

As in any market or commerce, the City of Calgary’s real estate market is no different. Below we will give you a window into what the economists see. A brief but insightful overview of Calgary real estate market trends

Before we get to business, let’s think together about why it is that Calgary’s real estate market is so attractive and prosperous. Ron Christensen can assist you with the answers. It’s mainly because Calgary is one of the best places in Canada to dwell in, do business and just enjoy one’s life. 1st – Its favourable and appealing image is comprised of several key factors. The most evident and powerful of these is the oil and gas industry. Some say that the weather in Calgary, as well as the Calgary real estate sector changes depending on the industry’s fluctuation. 2nd –

Needless to say, the current Calgary real estate market along with the whole economy of Canada is living through a challenging period. I will share with you the insider info that will come in handy for those who are considering either investing in Calgary real estate or simply buying the family nest. 3rd – The real estate market in Calgary has proved to be quite resilient and independent from the fluctuation in the oil and gas sector, also the economy on the whole. We know that while the regular home prices dropped by 3-4%, the more expensive properties took a bigger hit. They remained on the market longer. When looking back two years, the prices of such property in Calgary have only changed slightly.

Calgary real estate property values – what’s new?

We have just given you a glimpse of what is happening in Calgary’s real estate market. That is not enough however for you to have a complete picture. You also need to be aware of the “most recent” tendencies in real estate property values. In most areas of the Calgary real estate market prices slid but not to a great extent. Higher inventories and weaker demand are the criteria that influence real estate property value in Calgary. This is particularly true in the apartment and condo sectors. In comparison with the previous year, June sales dropped by 7%. However, this situation can be made up for by the greater levels of inventory gains. At the same time, it is important to realize that the detached market in Calgary remains at more or less balanced value levels. On the contrary, we can observe a small decline in “new home builds”.

What do the latest reports say about the real estate market in Calgary?

Every month, especially since the economic decline, more and more new market overviews and predictions appear on the Internet. As of June, there was a published report, featuring the state of the real estate industry in Calgary on the whole, with specific communities in particular. It is said that the prices slowly but steadily decline. Still, it’s important to realize that the slide is not as abrupt as many had anticipated.

The latest data on Calgary’s real estate market is quite favourable

  • The area of detached and semi-detached houses shows a good tendency and has almost reached its balanced levels. The report says that the detached market rose by 0,4% in the past month. Still, it is 3/4% lower than in the previous year.

  • As for the sales activity, it is quite normal to see it decline in the summer. So the Calgary real estate stats report says sales declined by 7%. Also, it’s interesting to know that the new building has slowed down as well, and that has a reflection on inventory prices.

  • It is reported that higher inventories, relatively weak demand and longer time on the market will have a significant effect on the market’s pricing, especially in the apartment and condo segments.

With all that being said, the current situation in the real estate market in Calgary offers its distinct advantages to buyers. Now they have the perfect opportunity to get that new home at a price they previously couldn’t obtain.

The most comprehensive Calgary real estate predictions

People would not be people if they didn’t want to know what the future holds for them. These kinds of secrets bear some invaluable information that can be of use. This is particularly valuable for those who are hesitating whether or not to buy that new home. Everything is not quite as gloomy as some had predicted. On the contrary, the Calgary real estate forecasts are quite promising and positive for both sides of the market, be it a seller or a buyer.

The future outlook for Calgary’s real estate market is not all doom and gloom.

The predictions for the immediate future tell us that the period of 2016-2017 is going to have a stable tendency throughout the whole year. The predictions say it is little if any chance that the house prices will significantly decline – so for those who are still wavering over buying or not – “now” is a good time! Having a brief look at Calgary’s real estate market data in 2014 and comparing it with our forecast, we can see the following picture. The year 2014 was benchmarked with a $460,584 average selling price peak. Meanwhile, the predictions for the coming years estimate prices to drop by nearly $15,000. Currently, there is a better case scenario, where it shows the decrease will be a bit less – averaging around $449,500. On the whole, everyone agrees that in the future, the real estate market in Calgary will stabilize. In 2017 we will see moderate benchmark gains and fewer price drops.

Commercial property on the Calgary real estate market

Commercial real estate property in Calgary is one of the most popular areas on the market. It is all due to:

  • The region’s strong corporate businesses,

  • Industrial sector growth,

  • Retail business.

Current real estate reports say Calgary has had the best tendency in commercial real estate growth over the last decade. It can boast about its 40.0 million square feet of office space. Also, there are 23.9 million square feet of suburban office space available.

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Experts weigh in on the interest rate shifts in 2019

Interesting Insights;

Robert Hogue – senior, RBC

“We expect the Bank (of Canada) is going to raise the overnight rate a couple of times. More recently, we’ve delayed the next move, but we still think the bank is not done yet. As we’ve seen in the past year, the market has been struggling to a certain extent for a number of reasons, but more recently, what’s happening in the oil sector hasn’t been very good for confidence. Earlier in the year, the stress test and rising interest rates had played out on housing demand. It was an issue for homebuyer demand.”

Cuddy – senior analyst, Mortgage and Housing Corp.  

“Going forward, it’s CMHC’s view that interest rates will continue to rise modestly. In our projections, that’s what we’re showing for 2019 and 2020. Of course, increasing the cost of credit will impact the purchasing power of individuals who are looking to purchase a property. Their costs will rise as the cost of interest rises when they’re borrowing money to move into homeownership. In Calgary, there are a number of other factors that will impact the demand for housing. Interest rates are part of this, but the other part of the story is the economy still hasn’t fully recovered. So this, combined with higher interest rates, will certainly impact the demand for housing and perhaps put increased pressure on the rental market, which is what we’ve seen throughout 2018.”

Will Dunning – chief, Professionals Canada

“I do believe that financial markets were inordinately panicky at the end of last year and interest rates fell probably prematurely. So I would guess interest rates will probably retrace a little bit over the next couple of months upwards. But I think for the second half of the year, there’s going to be more economic weakness and I don’t think there will be further increases beyond the middle of the year.”

Sal Guatieri – senior economist,  Group   

“We expect interest rates to rise very modestly further this year. The Bank of Canada is expected to resume raising interest rates in the second half of the year, with a move in July and then a final move this cycle in December – so a total of 50 basis points. That will still leave interest rates historically low. It will weigh on demand a bit further, especially in Calgary, where the market is already struggling and has been for several years now since the last oil price shock in 2015. That shock left the Calgary market with a large overhang of unsold homes, particularly condominiums. We were starting to work through that overhang until the recent downturn in oil prices. It’s a market that’s still very much struggling, very much ruled by buyers.”

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