The Calgary Housing Market - Are House Prices Dropping in Calgary?
News outlets will say one thing about the Calgary Housing Market. Friends and family will say another. With so many facts and figures, predictions and statistics thrown at you, how can you make an informed choice about what and when to buy in Calgary? The housing market fluctuates from year to year, and there are trends that can be found in how the homes sell in this area. To get a grasp of what you need to know, we’ve compiled a breakdown of the best ways to determine how the market affects your decision to buy or sell your home. We’re going to show you what we do to get you the most accurate, up-to-date and honest advice about what to do with your home.
Housing Market in Calgary: Past, Present and Future Trends
As you may know, the market here is directly related to the major industry of the city, namely oil and gas. That means when the industry picks up, so do housing process and demand. But, as happened a few years ago, when the industry is in decline, housing prices can sharply drop. Businesses leave town. People lose their jobs, and housing prices fall dramatically, affecting the entire city.
At the moment, Calgary is a slow, but steady, recovery stage. As businesses return to Calgary and the oil and gas industry is restored to former heights, housing prices are following suit.
What does that mean for you? For those who invest in the real estate market in Calgary, this is a great time to buy. Investors can take advantage of steep discounts and sale prices in a time when people are actively seeking out housing to return to Calgary. It’s that time-honoured principle of “buy low, sell high”. And it seems now is the time to do it. All included, investors, developers, and home buyers are cautiously optimistic about the Calgary housing market. The speculations and predictions can vary depending on the source, but most agree that with exceedingly positive oil prices, homes prices should be increasing. Predictions only tell us so much, but from what we can see, housing prices have yet to catch up on that recovering trend. That tells us that it’s a great time buy.
We prefer taking the approach that the best source of information is the one that has no agenda, no skin in the game. That information comes from a few sources and requires some interpretation to understand. Not all properties are considered equal ie: Downtown Calgary or the Suburbs, location plays a large part of the data. Here are a few unbiased sources that help inform us about what’s happening out there.
Calgary Housing Market Data Trends
The City of Calgary has extensive data available on housing process, community populations, densities, trends, and several other points that can affect buying and selling decisions. Every year, Calgary collects all that census data so they can plan their programs and spending. This is invaluable for us as it clearly shows where people are moving, which neighbourhoods are hot, and which communities are in decline.
Housing Market Reports and News
Cautiously, we do rely on news reports to gain a sense of what’s going on as well. I say cautiously because we are aware that the story is always trying to sell something. National news outlets and reputable financial news outlets are great sources. They tend to put Calgary’s housing market in perspective to the whole country. As you are aware, Calgary’s house prices are linked with several other factors like oil prices, the strength of the dollar, bank interest rates and lending rules, and what our neighbours to the South are doing. This all informs us what Calgary’s market should look like.
Housing market in Calgary
From our own data, we can see which communities are hot and which have slower markets. We can advise which condo listing to buy or sell depending on what we can see in our own numbers. Trends pop up every now and then, and we can compare them to how Calgary Alberta's home prices looked over time. We don’t put all our eggs into the “trend” basket, but it does help us assess our decisions and advice.
Calgary Geographical info.
• City 1,239,220
• Density 1,501.1/km2 (3,888/sq mi)
• Urban 1,237,656
• Urban density 2,111.8/km2 (5,470/sq mi)
• Metro 1,392,609 (4th)
• Metro density 272.5/km2 (706/sq mi)
• Municipal census (2018) 1,267,344
• Land 825.56 km2 (318.75 sq mi)
• Urban 586.08 km2 (226.29 sq mi)
• Metro 5,110.21 km2 (1,973.06 sq mi)
Calgary Housing Data Dump | Mid-2018
It’s midway through the year already. Can you believe it? It won’t be long before Christmas decorations will start appearing in stores. And that’s for Christmas 2019.
Let’s have a look at how Calgary real estate listing market has performed this year and what we can expect in the near future.
The big factors pressing on the market are strict lending regulations, higher interest rates, and a slower-than-expected recovery. That, in turn, reflects in sales figures. They just aren’t as high as originally anticipated.
Ann-Marie Lurie, the chief economist of the CREB® weighs in on this trend.
"Easing sales combined with rising inventories have pushed the market into an oversupply situation for all products, affecting pricing for all products, which include detached, semi-detached / townhomes for sale, and apartments."
So, what’s next? Across the entire city, we expect to see prices roll back by about 1% in housing , while apartments should show a 2.5% decrease. That seems to be the normal affectation on housing prices when the economy isn’t performing as it should.
Lurie commented on this trend as well, noting that the prices weren’t really expected to improve all that much, but the greater decline is due to the difference between an excessive supply compared to a slowing demand.
But let the doom and gloom stop here, because the second half of 2018 is expected to pick up. Recovery will accelerate, and the declines we see across the housing market in Calgary will slow down to expected rates. Not enough to offset the beginning of the year, but it’s a start.
Let’s talk specifics here. Sales in the city are expected to hover around 17,000 units, a nearly 10% decline from the forecasts made late 2017. That will result in an increase in listings, a further discrepancy in the supply/demand chain. The second half of the year will ease that balance, reducing inventory numbers to a manageable rate. This isn’t a full recovery to what we would want, but it’s heading in the right direction.
CREB® president Tom Westcott weighs in on the forecasts. "Patience is required during periods of recovery"
He goes on to say, "A solid pricing strategy will make a sellers' home more attractive. The same kind of strategic thinking is true for buyers who need to consider local market trends...to make an informed purchase decision."
Calgary Real Estate Prices
Now for the big question on all our minds, Why?
As Paul Harvey would say, “and now, the rest of the story”. We can make some speculations here. Higher rates to lenders and tighter regulations have restricted first-time buyers from entering the market. This, in turn, pulls down the existing homeowners from upgrading their housing situations. It’s a “trickle-up” effect that impacts us all.
We’re just not back to pre-recession levels yet. Recovery is what’s happening, but maybe not as fast as we would ideally like. Jobs have grown, but not in the areas we would expect. And as always, Albertans are slow to show their trust in the sectors that collapsed in the past. Could this negatively impact the second half of the year? Possibly, but that trust is slowly creeping back into the Calgary real estate market.
Let’s hope that trend continues in the right direction over the next 6 months.
The Best Advice for your Home in Calgary
When you’re looking for an honest conversation about Calgary’s market, we’re happy to help. Know this: we’ve worked very hard to give you our best interpretation of the current state of real estate in Calgary. We’ve compiled the Calgary Housing Market, analysed the data, and what we present, along with our years of expertise, is the most accurate information you can get about your home.