Calgary’s resale housing market may have cooled down a little bit in the second half of 2022 but it’s still going to set a record this year for MLS sales.
As of Wednesday, the Calgary Real Estate Board’s website was showing that year to date transactions have already surpassed the record year set in 2021. Last year, there were 27,686 properties that sold in the city real estate market, which was up about 72 per cent from 2020 and 44 per cent higher than the 10-year average.
So far this year there have been 29,575 transactions, up 7.42 per cent year over year.
Also, new listings of 38,840 have increased by 3.29 per cent over last year with the median sale price up 6.81 per cent to $475,000 and the average sale price up 4.89 per cent to $516,937.
According to RE/MAX’s 2023 Canadian Housing Market Outlook Report, Calgary’s market is balanced, but is expected to shift into seller’s territory in early 2023. First-time buyers are driving demand in the region, with move-up and move-over buyers trailing close behind – a trend that is expected to continue into 2023.
“Condos are currently the dominant housing type in the region, with single-detached homes expected to drive the majority of sales in 2023, as buyers seek additional living space. Inventory is anticipated to remain low in the first quarter of the year, before steadily increasing through the third quarter and finally sloping down again in the final quarter of 2023,” said the report which was released in November.
“Home sales are steadily increasing and are expected to remain on the rise in 2023. The luxury market has decreased its pace but is likely to pick back up next year. The average residential sale price in Calgary is anticipated to increase by seven per cent in 2023.”
Calgary’s real estate market is buoyed by a number of factors. The population is growing which supports the housing sector. The economy and employment are expected to continue their upward direction. An economic forecast by ATB Financial predicts annual GDP growth of 2.8 per cent in 2023 for Alberta while employment will increase by 1.8 per cent.
Housing affordability remains a key positive factor for Calgary’s housing market which is highlighted by the RBC Housing Affordability Measures which show the proportion of median pre-tax household income that
would be required to cover mortgage payments (principal and interest), property taxes, and utilities based on the benchmark market price.
Calgary’s share of income a household would need to cover home ownership costs was 41.6 per cent in the third quarter of 2022. Nationally, it was 62.7 per cent. Compared to other major centres, Calgary is one of the most affordable in the country – Vancouver (95.8 per cent); Toronto (85.2 per cent); Ottawa (51.7 per cent); and Montreal (51.9 per cent).
“Higher interest rates sting but so far the impact has been much less severe than in other major markets. Despite deteriorating significantly in the past year, housing affordability is only now departing from historical norms with RBC’s aggregate measure (41.6 per cent) surpassing its long-run average (38.7 per cent) in the third quarter. That’s because the market entered the pandemic from a very favourable affordability position. Buyers continue to respond accordingly, sustaining solid demand, and keeping activity brisk and prices firm. We expect little change in the near term,” said the RBC report.
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)