The Calgary housing market experienced a slow-down in activity during the summer, following a spike driven by the remote work trend early in the year. The market appears to be now stabilizing and is back on par with 2020 activity, according to Lowell Martens, broker at RE/MAX Real Estate (Mountain View). Average sales have increased by approximately 98% for single-detached homes, 82% for condominiums, and 108% for townhomes. Balanced conditions are expected to continue through the fall, in contrast to the seller’s market conditions that are characterizing 26 of 29 regions analyzed in the RE/MAX Fall 2021 Housing Market Outlook Report.
Over the last year, demand has been driven by young families, single millennial buyers, and young couples and families seeking more space. The most common property types sold in the Calgary housing market were single-family homes and semi-attached homes. Calgary is typically more affordable for first-time homebuyers compared to other urban centres such as Vancouver or Toronto.
Meanwhile, Calgary’s luxury market is still strong with large areas outside of the city being developed into three- to five-acre luxury properties. This trend is driven by move-up buyers looking for more space.
Calgary’s vacancy rates have nearly doubled, from 2.9% in 2020 to 6.6% in 2021, due to some renters choosing to buy due to affordability in the market, and many students doing online learning, freeing up more units for rent. Interprovincial transfers have greatly decreased, further impacting the rental market.
While vacancy has increased in the Calgary housing market, new home construction has slowed down due to a number of factors including land development, city staffing challenges, and the rising cost of materials.
Average residential prices in the Calgary housing market are expected to hold steady for the remainder of 2021.
From a broader perspective, most of Western Canada is experiencing price growth driven by low supply and high demand, resulting in challenging conditions for many homebuyers in large urban centres such as Vancouver. However, affordable options still exist for homebuyers who are considering alternative markets, thanks to their continued ability to work remotely. RE/MAX brokers have reported this trend in Edmonton and Calgary, where buyers are leveraging more purchasing power thanks to local housing affordability coupled with lower interest rates. RE/MAX brokers and agents anticipate this trend to continue through the remainder of 2021.
When comparing average sale prices year-over-year in Western Canada’s single-detached property segment, British Columbia saw the most notable growth, led by Nanaimo (+23%), Victoria (+19.1%), Kelowna (+20.5%) and Vancouver (+16.4%). Nanaimo and Kelowna also saw significant surges in their condo and townhome segments when compared to other Western Canada regions. Average condo prices increased 17.6% in Nanaimo and 17.3% in Kelowna, while townhome prices were up 21.9 % in Nanaimo and 17.7% in Kelowna. In Calgary and Regina, the fall outlooks are relatively status quo, with prices expected to remain flat in Calgary and +1% in Regina. Meanwhile, Edmonton, Saskatoon, Vancouver, Victoria, Winnipeg and Nanaimo are expected to see price gains ranging between 4% and 9% through the remainder of the year, according to RE/MAX brokers and agents.
National Canadian Housing Market Trends
Conditions in the Vancouver housing market are echoed across the rest of the country, with single-family homes seeing the most pronounced price increases year-over-year in 2021, rising between 6.8 and 27.3 per cent across 26 or 29 markets surveyed in the report. And much like Toronto real estate, activity in this property segment is being propelled by strong demand by young families, a trend that RE/MAX brokers and agents expect to continue through the fall.
The average residential price in Canada, across all housing types, is anticipated to increase by 5% in the remaining months of 2021.
“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”
Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”