A look at the housing market in Calgary for 2023

• In May 2023, Calgary’s average home sale price rose by 1.8% year-over-year to $518, 00. In contrast, the provincial average home sale price decreased by 0.3% from the previous year to $457,800.
• In May 2023, the median price of a single-family home in Calgary increased by 2.2% year-over-year to $584,700. In contrast, the median single home sale price provincially decreased by 0.3% from the previous year to $512,500.
• The townhouse/rowhouse price in Calgary rose by 8.4% year-over-year to $397,000 in May 2023. The provincial townhouse/rowhouse sale price increased by 6.3% from a year ago to $343,600.
• The median price of condos in Calgary and the province of Alberta has increased year-over-year, with Calgary’s median price rising to $297,500 and the provincial median price rising to $255,600.
• The median rent for a 1-bedroom apartment in Calgary experienced a 24.8% year-over-year increase, reaching $1,686 for May 2023.

Projecting the housing market in Calgary in 2023

According to data from the Calgary Real Estate Board (CREB) in May 2023, the average price of resale residential homes sold in Calgary was $541,800, showing a slight increase of 6.5% from the previous year.

The real estate market in Calgary is experiencing challenges due to a high sales-to-new-listings ratio and low supply, leading to increased home prices. The benchmark price has risen by almost 2% compared to last year, and is now over 25% higher than it was three years ago.

The sales to new listings ratio (SNLR) is a measure of the number of home sales compared to new listings. An SNLR below 40% indicates a buyer’s market where buyers have an advantage in negotiations. An SNLR between 40% and 60% is considered a balanced market, while an SNLR over 70% is indicative of a seller’s market.

Who is purchasing real estate in Calgary?

Historically, Calgary’s residential property market has been driven by a variety of demographics, including those looking to upsize their homes, foreign investors seeking investment properties, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in and around Calgary.

The recent passing of Bill C-32 in Calgary has introduced new legislation, including bans on foreign buyers and an anti-flipping tax. While there may be a shift in the city’s homebuyers demographic, it is uncertain whether the measures to limit foreign investment will have a significant impact. Statistics Canada reports that foreign investors account for less than 5% of Calgary’s total homeownership. However, the number increases when considering properties purchased by non-Alberta residents, particularly during the current economic boom.

Multi-property Investors

Investors and multi-property owners made up more than 33% of homebuyers in 2021, with higher numbers reported in Ontario, British Columbia, and Nova Scotia. Although no specific figures were given for Calgary, it is likely that residents of Ontario and BC seeking affordable real estate investments may target Calgary due to the potential for rental income to cover investment property costs.

Upsizing Buyers

Calgary’s demand for single-family homes has increased due to buyers upsizing. In February 2020, the average price was $458,300, which has since increased over 27% to $584,700. This trend has also impacted suburbs such as Arbour Lake, Haysboro, Fairview, Cougar Ridge, Hillhurst, Walden, and Capitol Hill.

Immigration & Out-of-province Migration

During the pandemic, many homebuyers left urban areas in search of more space and affordable housing. However, new immigrants are contributing towards a continued surge in Calgary’s housing market. People from various provinces, including Ontario and British Columbia, are relocating primarily towards Calgary. According a report by Remax, the federal government plans on bringing in 2 million new immigrants into Canada, who may also choose Alberta and Calgary as their preferred settlement destination.

First-Time Homebuyers

Calgary may be a more favourable option for first-time homebuyers seeking a mortgage, as it shares similar property tax rates to other large Canadian cities, such as Toronto and Montreal. However, compared to suburbs like Brooks and Lacombe, the location and taxes in Calgary may be more desirable.

The First Time Home Buyer Incentive program aims to aid home affordability in Calgary, but the stress test and high Bank of Canada rates still present challenges for qualification, especially for those without a combined household income exceeding $140,000.

Due to the recent decrease in home prices, the Calgary real estate market poses challenges for first-time home buyers without external financial support.

The rental breakdown for Calgary in May 2023.

For mortgages with a balance of $100,000, the average monthly cost for principal and interest is $550 for insured fixed rates and $620 for insured variable rates. These calculations are based on rates offered for insured purchases with less than a 20% downpayment over a 25-year amortization. A change of 0.25% in mortgage rates can impact the monthly payment by $14 to $16 on a 25-year amortization.

What are the predictions for the Calgary housing market in 2023?

Calgary’s housing market has seen a decline in prices compared to last year’s national surge, likely due to the Bank of Canada’s rate hikes. Prices in Calgary remain below the national average and the stress test has made it more difficult to qualify for mortgages. However, it is expected that once mortgage rates decrease, Calgary’s housing market will recover quicker than other areas.

Is there a projected increase in Calgary’s housing prices for 2023?

Some experts believe that there may be a larger turnaround soon, as buyers wait for the right time to make a move. The market has already shown some improvement and is moving towards a balanced state.

What are the requirements for mortgage approval in Calgary?

When considering a mortgage in Calgary, it is recommended to review current Calgary mortgage rates to determine affordability. This will provide insight into the cost of purchasing a home in Calgary based on present prices and rates. To initiate the process, obtaining a quote or meeting pre-approval requirements may be necessary.

Final Thoughts

Calgary’s property market is projected to maintain its strength with anticipated increases through the end of 2023. The average home price in Calgary is recovering faster than other regions in Canada, following a period of record price increases during the pandemic and significant appreciation last year.

The Calgary property market is showing signs of recovery, but fluctuations are normal in the long run. Qualified buyers can always find good opportunities to purchase property, and immigration is expected to continue driving demand in the Canadian market, leading to further increases in property values.

Potential home buyers in 2023 should anticipate a forthcoming upswing in the housing market within the upcoming months. It may be helpful to seek guidance from an experienced real estate expert to guide you through the latest rates, trends, and requirements in Calgary.