Metro Calgary
Real Estate Trends and Price Forecast

Calgary, AB

HIGHLIGHTS

  • Home values in Metro Calgary plateaued over the summer, and the market has mixed signals.

  • A new trend may be emerging – Demand has weakened in the second half of the year, supply is consistently trending upward, and prices might be beginning to drop.

  • Calgary’s detached house purchase demand is low compared to higher condo apartment demand. However, both are losing momentum.

  • A multi-factor analysis identifies Metro Calgary as a moderate-risk property market. Keep reading to find out why.

  • Budgets for home purchases are under strain due to the higher mortgage rates. While rates are expected to drop in 2025, that’s cold comfort for today’s buyers.

This article covers:

  1. What is the current state of the property market?

  2. Where are prices headed?

  3. Should investors sell?

  4. Is this a good time to buy?

1. What is the current state of the Calgary property market?

Home Price Overview

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Metro Calgary has a population of roughly 1.7 million and was ranked 93rd among the world’s 100 best cities by Resonance Research.

Calgary was ranked the fifth most livable city in the world and the most livable city in North America in the Economist Intelligence Unit’s annual list of the world’s most livable cities.

The pandemic turbocharged Metro Calgary housing demand, and since supply was slow to respond, this lack of supply pushed prices up dramatically. Higher prices pushed many aspiring homeowners further away from their dreams.

Then, post-pandemic mortgage rates increased from under 2 percent to over 6 percent. This made property purchases even more difficult and forced even more potential buyers to sit on the sidelines.

In the first half of 2024, prices rose due to fewer sellers and constrained supply rather than due to increased buyer demand.

For those contemplating selling their homes, waiting until next Spring might bring some advantages if you aren’t in a hurry. Spring is the best time to sell because there is typically less supply. Buyer activity in Canada usually peaks in May. Families like to move over the summer so their kids don’t need to switch schools in the middle of the year. This pattern is the typical annual real estate cycle.

Prospective homebuyers might consider waiting for a lighter mortgage burden. Mortgage rates are relatively high, but most analysts expect them to continue to fall in early 2025. The challenge for buyers waiting for lower borrowing costs is that prices continue to inch upward.

Consumer sentiment has taken a substantial hit, and the market fundamentals point toward risk and uncertainty. However, consumer sentiment is volatile and an unreliable predictor of future property price trends.

 

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Metro Calgary Detached House Prices

Calgary house prices are exploring uncharted territory but may be losing steam. It is probably too early to make a call because prices typically soften between August and December.

We believe politicians hope to guide the market toward a typical annual real estate cycle with price growth of 1 to 3% annually—in line with income growth.

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Calgary's house prices stand out against the declining trend in other major Canadian cities like Vancouver and Toronto. Several factors contribute to this disparity:

  1. Limited Supply: Calgary has experienced fewer active listings than other cities, leading to a shortage of available supply. On the other hand, Calgary has record-high home construction. As these homes are completed, they could ease the supply shortage.

  2. Steady Demand: Calgary attracts new residents due to its relatively affordable housing and good job opportunities. This consistent demand puts further pressure on the already constrained supply.

  3. Increased Investment: Assuming that the Canadian average of 20-30% of purchases made by investors holds in Calgary. These investors, attracted by higher rental yields compared to other cities, see Calgary as a lucrative market. A rental in Calgary generates twice the rental income per dollar spent on the home compared to Vancouver. Investor buying activity further reduces available housing for owner-occupiers and increases prices.

So, while other cities experience price corrections due to various factors, Calgary's housing market benefits from:

  • Solid demand from new residents arriving from other provinces and abroad.

  • Limited supply, creating competition and pushing prices up.

  • Higher rental yields compared to other markets attract investors.

However, it's important to note that the market might eventually face correction if supply significantly increases or demand weakens – both are emerging trends this autumn.

Overall, Calgary's housing market presents a unique picture within the Canadian context. While external factors can influence it, understanding the local supply-demand dynamics, investor activity, and price comparisons is crucial for deciphering its trajectory.

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Metro Calgary New Construction Home Prices

Prices of new homes have shot upward since May 2023. Based on economic fundamentals, they might hit a ceiling soon.

Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes

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There is a record number of homes under construction. Housing starts have been very strong this year, but construction completions have outpaced them as developers sprint to the finish line.

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Market Risk

Based on Mortgage Sandbox Analysis, Calgary is at high risk of a significant market correction.

 

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Metro Calgary Condo Apartment Prices

Metro Calgary condo apartment values rose briskly in the Spring, similar to the detached house market, where prices have plateaued. Again, this isn’t unusual for this time of year.

A December 2022 CBC news report said that Calgary had attracted the attention of many Ontario real estate speculative investors. Lower price-to-rent ratios and landlord-friendly tenancy laws attract out-of-province investors, which might explain why the condo market has been hotter than the detached house market.

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With more people working from home, we expect developers to begin marketing larger (i.e., 2—and 3-bedroom apartments) to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.

At Mortgage Sandbox, we would like developers to build 4 and 5-bedroom condos because:

  • Not everyone can afford to buy a house for their family.

  • Canadians who work from home need more room to segregate workspace from living space.

  • Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

  • Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Metro Calgary Townhouse Prices

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Very affordable for first-time homebuyers

Even in the current market conditions, a condo is well within reach for most Calgarians. A homebuyer household earning $99,000 (the median Metro Calgary household before-tax income) can get a $425,000 mortgage. That’s more than enough to buy a benchmark condo, but a house purchase is moving out of reach for most locals.

 

How much can you afford?

Our mortgage calculator takes uses up-to-date mortgage rates and estimates the price of a home you can afford.

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What about the rest of the West?

Read the Edmonton Home Price Forecast, Vancouver Home Price Forecast Forecast, and Okanagan Valley Home Price Forecast.

2. Where are Metro Calgary prices headed?

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There is a lot of uncertainty in the forecasts for 2024, 2025 and 2026. Many of the forecasters we've surveyed have different expectations for:

There is no consensus among economists.

How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.

 

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At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review several forecasts from leading lenders and real estate firms, and we then present the most optimistic estimates, the most pessimistic predictions, and the average forecast. Want to learn more about real estate risk? We’ve written a comprehensive report explaining the uncertainty level in the Canadian real estate market.

Our forecast inputs:

3. Should you sell your Calgary home?

Tight supply in Calgary’s market gives sellers a negotiating advantage. However, the annual real estate cycle usually favours sellers in the first half of the year.

Sellers should consult a mortgage broker early to prioritise flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check out our Complete Home Seller Guide.

 

Need an estimated home buying budget?

We will tell you what you can afford with transaction fees and taxes baked in, and fewer surprises.

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4. Is this a good time to buy a Calgary home?

It’s hard to say. Prices keep rising, so there is a risk of being priced out of the market. At the same time, there is a risk that the Calgary market could weaken due to the impact of the rest of Canada. It’s almost impossible to time the market. If you are buying your forever home and don’t plan to sell for ten years, then the risks of buying now are lower.

Regardless, the annual real estate cycle usually favours buyers in late summer.

If you are considering buying, drive a hard bargain and pay as close to market value as possible. Also, don’t bite off more than you can chew when it comes to financing.

Are you planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

 

Do you have a financing strategy?

Try our strategy assessment to maximize your risk-adjusted investment returns.

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