‘We haven’t seen spreads narrow like this … since 2006,’ said the Calgary Real Estate Board’s chief economist
Low inventory and rising prices became common refrains in Calgary’s housing market last year — a trend the city’s real estate board says will likely continue in 2024.
The city’s benchmark price landed at $570,100 in December, say new data from the Calgary Real Estate Board (CREB), to end a year in which buyers increasingly shifted toward more affordable apartment-style homes.
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“A consistent theme throughout 2023 is that we have struggled with supply — especially affordable supply,” said Ann-Marie Lurie, CREB’s chief economist. Overall, Calgary is averaging a 44 per cent decline in inventory over its 10-year average.
That theme is expected to persist among homes where the need is greatest: There’s consistently been one month’s supply or less for single-detached homes selling for less than $600,000, which Lurie said is around the lower end for Calgary’s market.
“Conditions are still really tight in the lower end of the market,” she said.
The same goes for apartment condos: Those going for less than $200,000 have less than a month of supply, and $300,000 to $400,000 units have less than two months of supply.
The only segment that improved inventory in 2023 were high-end, single-detached homes going for more than $700,000, Lurie said. “That’s where we actually have some supply,” she said.
Those rising prices for single-detached homes encouraged more buyers to apartments and condominiums, according to the CREB report. Apartment-style properties were the only type to report a gain in sales over 2023, notching a record 7,884 sales — and subsequently resulting in record-high average prices.
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As of December, apartment and condominium units surpassed Calgary’s 2014 record high, hitting $321,400 — a 13 per cent increase over the previous year.
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Largely thanks to rapid population growth in Alberta over the past two years, Calgary bucked national trends that generally saw major housing markets simmer amid a high-interest environment.
The steep increases in interprovincial migration welcomed new buyers who experienced runaway housing prices in provinces such as Ontario and B.C., Lurie said, which helped offset the intended effects of high interest rates.
“In a higher interest rate environment, you wouldn’t expect to see the sales growth and the higher price points, but we continue to have activity improve here,” she said. “I think that’s kind of a reflection of that interprovincial migration.”
Overall, Calgary’s benchmark price slowed compared to 2022 levels, which grew 12 per cent that year. For 2023, the benchmark rose six per cent. Still, Calgary remains affordable relative to markets such as Toronto and Vancouver, Lurie said.
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In the early days of 2024, Lurie said she’ll be keeping a close eye on new inventory coming online, with early-year conditions already tight.
“One of the things I like to look at is the relationship between sales, new listings and inventory,” she said, “and we haven’t seen spreads narrow like this . . . since 2006.”
At that time — around 18 years ago and shortly before the 2008 financial crisis — Alberta was also seeing strong migration and the economy was also strong.
“It wasn’t just about people coming here for affordability. People were coming here for work back then . . . overall, our economy was doing really well, and that attracted a lot of people here for jobs,” she said.
Calgary is expected to see an eight per cent rise in aggregate housing prices this year, a recent Royal LePage report said, noting Calgary is bucking national trends amid a high-interest environment due to rapid population increases over the past two years.
Those increases would see the aggregate home price reach $711,612.
Condominiums and apartments’ increasing popularity are reflected in those projections, too. Condos are expected to increase 9.5 per cent by year’s end, hitting $286,562.
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
The Canadian Press. All rights reserved.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
The Canadian Press. All rights reserved.
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