Resale housing market in Calgary remains healthy despite challenges

There’s been a lot of negativity surrounding the Canadian housing market recently due to elevated interest rates and how that’s making the cost of homeownership beyond the reach of many.

However, Calgary’s resale housing market activity doesn’t appear to be affected these days as the city has registered two straight months of record MLS sales.

According to the Calgary Real Estate Board, both June (3,146) and May (3,120) this year had the most MLS sales ever for those months. June sales were up 10.9 per cent from a year ago while May sales rose by 1.9 per cent year over year.

And the appetite for homeownership has not subsided. As of July 19, the number of MLS sales in the city stood at 1,626 for the month which was up 16.39 per cent from the same period a year ago in July.

While the last three months have been strong, the first part of the year showed some weakness with year over year sales down significantly. That has kept overall MLS sales in the city off from last year’s level. As of July 19, year-to-date sales this year of 15,938 were down 20.65 per cent from the same period a year ago.

But keep in mind the city is coming off of two record years for MLS sales. In 2021, it registered 27,686 transactions, up nearly 72 per cent from the year before when the pandemic hit and also 44 per cent higher than the 10-year average. Then 2022 was another record year with 29,672 transactions, up seven per cent from 2021.

“I think it’s an environment where positives can’t be ignored,” said Alan Tennant, CEO of the Calgary Real Estate Board. “It feels like a market that’s got some strength to it. Some legs to it. This is the kind of environment that realtors do an excellent job of advising clients. They’re debating timing and what the opportunities are. All the indicators are very positive.

“Even though there’s upward pressure on the interest rates, let’s not lose sight of the historic low levels we’re at. The in-migration numbers are very strong. We continue to see the Calgary region being a great magnet for people moving into the area and it seems employment and unemployment levels are both manageable to a degree, certainly suggesting the vibrancy of our economic environment.

“There’s some positivity in every corner of the data and there’s always clouds. Let’s face it. That’s the reality of any marketplace but for us compared to the rest of the country this is a pretty great place to be.”

In recent years, the high cost of homeownership drove more people to the rental market. But this year has seen significant rent increases in most major cities as landlords take advantage of low supply and high demand. Could that dynamic drive more people to look at homeownership?

“That’s right. Our members are dealing with clients who are saying ‘I thought I was going in one direction or another’, but this lack of inventory whether it’s rental properties of the type they’re looking for or housing, they start looking for other alternatives,” said Tennant.

“There’s a lot of positives in the Canadian mortgage environment that enable people to take the step into homeownership and if renting is really their future our membership helps them with that as well but they’re not going to be disappointed by the other alternatives that are out there because quite often people have a certain part of town, certain housing type that they’re focused on and the market has a very broad spectrum of housing and there’s some very exciting developments in every corner of the city. Affordability is kind of an exciting possibility in most corners of the market.”

Calgary has always been recognized as one of the most affordable housing markets in Canada among major centres. That affordability could become increasingly more attractive for potential homebuyers coming from other parts of the country, particularly the Toronto and Vancouver regions, where home prices are more than double what they are in Calgary and also now because renting a place is so expensive in those other major markets.

According to the latest Canadian Real Estate Association report, the MLS Home Price Index Benchmark Price for Calgary in June was $538,600. For the Greater Vancouver Area it was $1,186,100 and for the Greater Toronto Area it was $1,163,200.

Those are attractive and appealing numbers for people living in other parts of the country as the Alberta government and Calgary Economic Development continue to reach out to other Canadians about moving here to enjoy a more affordable lifestyle.

(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)