In February 2025, Calgary's real estate market showed a shift from the strong seller’s market seen in previous years. While sales remain above long-term trends, there was a 19.3% decrease in sales compared to February 2024, with 1,721 transactions recorded. Meanwhile, inventory levels increased 75.6% year-over-year, reaching 4,145 units, creating a more balanced market.

The total residential benchmark price was $587,600, reflecting a 4.4% increase compared to the same month last year. However, the months of supply more than doubled to 2.41 months, indicating that homes are taking longer to sell.

Sales and Pricing Trends by Property Type

• Detached homes saw the highest sales volume (765 units), though sales were down 19.6% YoY. Prices increased by 5.1% to $760,500.

• Semi-detached homes had 165 sales, with prices up 6.9% YoY, reaching $683,500.

• Row homes experienced a 9.4% drop in sales but still saw a 2.8% price increase to $446,800.

• Apartments had 473 sales, marking a 26% decline YoY, while prices rose 4% to $334,200.

Market Dynamics & Trends

• Inventory Growth: February’s inventory level surged 76% year-over-year, mainly driven by more listings in the affordable apartment and row home segments.

• Sales Decline: Despite historical trends, sales were down 19% YoY, showing that rising interest rates and affordability concerns are impacting buyers.

• Slower Price Growth: While home prices still increased across all property types, the pace of appreciation has slowed compared to 2024.

• Higher Days on Market: The average days on market for a home in Calgary increased to 33 days, up from 24 days last February.

Regional Highlights

• City Centre saw a 1.0% annual price increase, with a benchmark price of $589,500.

• North West Calgary had a 1.1% price growth, bringing the benchmark price to $646,300.

• The East district recorded the highest price increase at 3.2%, with a benchmark price of $432,500.

• The South district remained one of the most competitive, with the lowest months of supply at 1.6 months.

Outlook for March 2025

With rising inventory and slower sales, Calgary's market is transitioning toward more balanced conditions. Buyers now have more options, while sellers may need to adjust pricing expectations to remain competitive. If interest rates stabilize, market activity may pick up in the coming months.

By CREB®

Following three consecutive years of limited supply choice, inventory levels in January rose to 3,639 units. While the 70 per cent year-over-year gain is significant, inventory levels remain lower than the over 4,000 units we would typically see in January. 

Inventories rose across all property types, with some of the largest gains driven by apartment-style condominiums.

Overall sales in 2024 were just shy of last year’s levels, as gains for higher-priced homes offset pullbacks in the lower price ranges caused by supply challenges.

“Supply levels are expected to improve this year, contributing to more balanced conditions and slower price growth,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, the adjustment in supply is not equal amongst all property types. Compared with sales, we continue to see persistently tight conditions for detached, semi-detached and row properties while apartment condominiums show signs of excess supply for higher priced units.”

Citywide, the months of supply reached 2.5 months in January, an improvement over the one month of supply reported last year, but it is still considered low for a winter month. The month of supply ranged from under two months for semi-detached properties to 3.5 months for apartment-style units.

Rising supply resulted from a boost in new listings compared to sales. New listings rose to 2,896 units in January, compared to 1,451 sales. Sales in January were down by 12 per cent compared to last year. However, even with a pullback in sales, levels remained nearly 30 per cent higher than levels typically recorded in January. 

The total residential benchmark price in January was $583,000, which is relatively stable compared to levels reported at the end of last year and nearly three per cent higher than last January. Price growth ranged across districts within the city as well as property types. 

Detached

Driven by gains from homes priced above $600,000, new listings reached 1,228 units in January, which is 29 per cent higher than last year. At the same time, sales activity slowed to 674 units, which brought levels in line with long-term trends. The improvement in new listings relative to sales did help support inventory gains. However, the 1,448 units in inventory are still nearly 27 per cent lower than levels we traditionally see in January, and the months of supply remained relatively low at just over two months. 

While conditions are not as tight as last year, there is some variation within the city districts as more balanced conditions are taking shape in the City Centre and North East districts. In January, the unadjusted benchmark price was $750,800, slightly higher than last month and seven per cent higher than last January. On a seasonally adjusted basis, prices have remained relatively stable since the second half of last year. 

Semi-Detached

Like other property types, gains in new listings relative to sales helped support some gains in inventory levels. While the semi-detached sector represents a relatively small share of activity in our market, sales in January did improve over last year, keeping the months of supply just below two months. Within the city, there is some significant variation, as the City Centre, North East, and West districts are all reporting near or above three months of supply, while all other districts have less than two months of supply. 

The unadjusted benchmark price in January was $673,600, slightly lower than last month but over eight per cent higher than levels reported last January. The districts with higher months of supply also reported some modest monthly price declines, offsetting stable to modest gains in the North, North West, South, South East, and East districts.

Row

January reported a boost in new listings compared to sales activity. This caused inventory levels to rise to 589 units, more than double the near-record low levels reported last January. The recent rise in new listings has helped bring inventories to levels that are more consistent with long-term trends. At the same time, the months of supply also improved, pushing above two months, a trend that started to play out over the second half of last year. 

Improving supply relative to sales has taken some of the pressure off home prices, but not consistently across the city. Citywide, the unadjusted benchmark price was $444.900, slightly lower than last month and nearly five per cent higher than last year. While prices are higher than last year across all districts, the largest monthly adjustment occurred in the North East district. 
 

Apartment Condominium

Sales in January slowed to 370 units over last year's record high for the month. At the same time, new listings reached 922 units, a new high for January. The gain in new listings relative to sales caused inventories to rise to 1,2,95 units. While sales have remained relatively strong, the gain in supply has pushed the months of supply up to 3.5 months. This is much higher than the levels seen over the past three years but nowhere near the nine months reported in January prior to the pandemic. 

Improved supply choice has weighed on prices over the past five months. In January, the unadjusted benchmark price was $331,400, slightly lower than last month but still five per cent higher than last year's levels. Like other property types, the level of adjustment varies across the city. The largest monthly declines occurred in the North, West and South districts.  

The Calgary real estate market in January 2025 experienced notable shifts, with increasing inventory and fluctuating sales across various property types. While new listings surged, sales saw a moderate decline, impacting supply levels and price trends.

Sales and Inventory Trends Total sales in January 2025 reached 1,451, marking a 12.01% decline compared to January 2024. The total sales volume also decreased by 6.50% to $877.9 million. Meanwhile, new listings rose significantly by 35.52%, reaching 2,896, leading to an inventory increase of 68.63%. Consequently, the months of supply climbed from 1.31 to 2.51, reflecting a 91.64% increase, signaling a shift toward a more balanced market.

Price Movements Despite increased inventory, prices demonstrated resilience. The benchmark price increased by 2.79%, reaching $583,000, while the median price saw a more substantial rise of 9.46% to $572,500. The average price also appreciated by 6.26% to $605,026.

Regional Breakdown

1. City Centre:

   • Sales: 674 (-8.05%)

   • Benchmark Price: $750,800 (+7.03%)

   • Inventory: 1,448 (+44.94%)

   • Months of Supply: 2.15 (+57.63%)

2. Northwest Calgary:

   • Sales: 132 (-55.30%)

   • Benchmark Price: $783,400 (+6.99%)

   • Months of Supply: 1.84 (+46.27%)

3. Southeast Calgary:

   • Sales: 181 (-53.59%)

   • Benchmark Price: $718,700 (+6.95%)

   • Months of Supply: 1.87 (+23.32%)

4. Northeast Calgary:

   • Sales: 174 (-47.70%)

   • Benchmark Price: $600,700 (+4.89%)

   • Months of Supply: 3.42 (+89.88%)

Property Type Analysis

• Detached Homes: Sales fell 8.05% to 674 units, with the benchmark price increasing 7.03% to $750,800.

• Apartments: Sales dropped 24.18%, but benchmark prices increased 5.31% to $331,400.

• Semi-Detached Homes: Sales rose 22.14%, and prices surged 8.31% to $673,600.

• Row Homes: Sales declined 16.84%, but prices increased 4.86% to $444,900.

Market Outlook The Calgary housing market in early 2025 shows a shift from the extreme seller’s conditions of previous years toward a more balanced market. Increased inventory levels give buyers more choices, while price growth remains steady due to ongoing demand. If new listings continue to outpace sales, price growth may stabilize further in the coming months. However, the strong price appreciation in certain segments, particularly semi-detached homes, suggests ongoing demand in specific property types.

Conclusion The Calgary real estate market in January 2025 presented a mixed performance. Rising inventory levels have led to a slight slowdown in sales activity, but price growth remains positive. Buyers have more options, and sellers may need to adjust expectations in response to a more balanced market. The overall trend indicates a cooling market compared to the rapid growth of previous years, setting the stage for a potentially more stable year ahead.

The Calgary real estate market is expected to maintain its robust performance in 2025, supported by strong population growth, easing lending rates, and improved housing supply. Forecasted sales of over 26,000 units remain 20% above long-term trends, reflecting resilience in housing demand despite economic uncertainties. Price growth is anticipated to moderate, with a citywide annual increase of approximately 3%, compared to 7% in 2024.

Key Economic Drivers

1. Population Growth

   • Population growth in Calgary is projected at 3.1%, down from 5.6% in 2024. Although migration is slowing, it remains a significant driver for housing demand.

   • Alberta’s overall population growth is expected to stabilize at 1.9%, bolstered by both interprovincial and international migration.

2. Economic Stability

   • Alberta's economy is poised for a 2.5% growth rate in 2025, driven by investments in alternative energy, carbon capture, food manufacturing, and AI technologies.

   • A potential easing of international tariffs could amplify economic growth, with stronger-than-expected migration and housing demand as likely outcomes.

3. Employment Trends

   • Employment is forecasted to grow by 2.3% in 2025, with notable gains in construction, retail, healthcare, and education sectors.

   • The unemployment rate is projected to decrease slightly to 7.8% by year-end.

Calgary Market Dynamics

1. Detached Homes

   • Sales Forecast: Detached home sales are expected to grow modestly, supported by easing lending rates and increased supply.

   • Price Growth: Prices are forecasted to rise by 2.9%, down from the 10.8% increase in 2024. Inventory growth in the $600,000+ range will aid in balancing the market.

   • Challenges: Demand in lower price segments may outstrip supply, resulting in localized price pressures.

2. Semi-Detached Homes

   • Demand: Affordability challenges in the detached segment are expected to sustain demand for semi-detached homes, with sales forecasted at 2,400 units.

   • Price Growth: Prices are anticipated to increase by 3.1%, aided by inventory growth and a shift toward balanced conditions.

3. Row Homes

   • Affordability: Demand for row homes will be driven by affordability, particularly in the $400,000–$500,000 range.

   • Inventory: Rising supply will help moderate price growth to 3.4%, compared to 14.2% in 2024.

4. Apartment Market

   • Market Balance: Increased new home completions and easing rental demand will shift the market toward more balanced conditions.

   • Price Growth: Annual price increases are forecasted at 1.8%, with lower-priced units maintaining stronger demand.

Surrounding Areas

1. Airdrie

   • Benchmark price: $642,075 (+9.1% YoY).

   • Rising inventory and record new construction are improving market conditions.

2. Cochrane

   • Benchmark price: $664,625 (+9.0% YoY).

   • Supply constraints continue, but new listings are helping ease market tightness.

3. Okotoks

   • Benchmark price: $693,933 (+9.1% YoY).

   • Persistent inventory shortages are driving price growth.

4. Chestermere

   • Benchmark price: $796,067 (+8.2% YoY).

   • Detached homes dominate the market, with strong demand in semi-detached and row homes.

Risks and Opportunities

1. Downside Risks

   • Prolonged economic uncertainty or broader U.S. tariffs could dampen consumer confidence and housing activity.

   • Rising inventory amid slowing demand might pressure prices in some segments.

2. Upside Risks

   • Faster-than-expected economic recovery and easing tariffs could bolster migration, sales, and price growth.

   • A significant reduction in lending rates could reinvigorate the market, particularly for first-time buyers.

Conclusion

Calgary’s real estate market in 2025 is set to remain resilient, with steady sales and price growth despite moderating economic conditions. The shift toward balanced market dynamics, driven by rising supply and easing demand pressures, indicates a healthier, more sustainable housing environment. 

This forecast report is derived from detailed data provided in the CREB® 2025 Yearly Outlook. Let me know if you’d like further refinements or additional details!

Calgary, January 2, 2025 – The year ended with 1,322 sales in December, a three per cent decline over last year. But nearly 20 per cent higher than long-term trends. Overall sales in 2024 were just shy of last year’s levels, as gains for higher-priced homes offset pullbacks in the lower price ranges caused by supply challenges.

“Population gains over the past several years have supported sales activity that has outperformed long-term trends. In 2024, sales would likely have been higher if there was more supply choice, especially in the lower price ranges,” said Ann-Marie Lurie, Chief Economist at CREB®. “That being said, we did start to see shifts occurring in the market in the second half of the year as supply levels started to improve for higher priced homes.”

As of December, there were 2,989 units available in inventory, still below long-term trends for the month but a significant improvement over the lower levels reported last December and levels reported early this year. Improved rental choice and significant gains in new home activity helped boost new listings in the resale market, driving higher inventories in the year's second half. While conditions vary depending on price range and property type, more housing options have helped to take some of the pressure off home prices, which stabilized in the second half of the year following steep gains in the spring. Overall, on an annual basis, total residential benchmark prices improved by over seven per cent.

SALES 1,322 2.9% Y/Y As we move into 2025, supply will continue to be a dominant theme. However, how they impact prices will ultimately depend on the type of supply being added and how demand holds up in the face of a changing economic climate. On January 21, CREB® will release its forecast report, highlighting the expectations and risks facing the market in the coming year.

Detached

Easing lending rates have likely supported some recent year-over year gains in detached home sales over the past three months. Improving sales were driven by gains for homes over $600,000, which also reported improvements in new listings. Inventory levels did improve within city limits for detached homes; however, conditions varied across districts. The City Centre, North East and North District all reported relatively balanced conditions over the last quarter of the year, while all other districts continued to struggle with seller market conditions. The relatively tight market conditions throughout the year caused prices to rise by nearly eleven per cent in 2024, a faster pace than what was reported in 2023. Much of that growth occurred during spring when supply levels were exceptionally low. Prices grew across all districts, with the strongest growth occurring in the most affordable districts of the North East and East.

Semi-Detached

Limited supply choice for lower priced detached homes drove many purchasers toward the semi detached sector. In 2024, there were 2,355 sales, with an annual gain of five per cent. Thanks to gains in new listings relative to sales, inventory levels started to improve, supporting a shift toward more balanced conditions by the fourth quarter. However, much of this shift occurred in the higher priced City Centre district, where the months of supply averaged three months in the last quarter. The annual average benchmark price increased by nearly 11 per cent to $669,042 in 2024. Like detached homes, exceptionally tight conditions throughout the spring caused the pace of price growth to rise over the seven per cent annual gain reported in 2023. Prices improved across all districts, ranging from an annual gain of under 10 per cent in the City Centre and West to gains exceeding 15 per cent in the North East and East districts.

Row

In 2024, there were 4,647 row home sales, a gain of over two per cent compared to last year and the second-highest total on record. The growth in sales was possible thanks to the 18 per cent gain in new listings, most of which occurred for homes priced above $400,000—the gains in new listings relative to sales supported inventory growth in 2024.

By the year's end, supply improvements helped take the pressure off home prices. However, the annual benchmark price rose by 14 per cent as conditions favoured the seller throughout the year. Prices rose across all districts in the city, with the gains ranging from a low of 12 per cent in the city centre to over 20 per cent in the most affordable districts in the North East and East.

Apartment

Easing sales in the second half of the year offset earlier gains, causing apartment sales to slow by four per cent compared to last year. However, last year was a record high for sales, and the 7,568 transactions this year reflect the second-highest year on record. At the same time, new listings have been on the rise, supporting inventory gains and a shift toward more balanced conditions by the end of the year. As more supply became available, we did see some price adjustments in the last quarter of the year. However, the quarterly decline did not offset the strong gains that occurred earlier in the year, and the annual benchmark price rose by 15 per cent. Price growth ranged from a low of 11 per cent in the city centre to over twenty per cent in the North East, East and South districts.

Supply on the rise, but not across all price ranges

As we transition into winter, Calgary's housing market is following typical seasonal trends, with activity slowing compared to the fall. However, year-over-year demand remains relatively strong. In November, increased sales in detached, semi-detached, and row homes offset a decline in apartment condominium sales. The 1,797 sales for November mirrored last year’s levels and remained 20 per cent above long-term trends for the month.

The significant shift lies in supply. Inventory levels rose to 4,352 units in November, a notable increase from the 3,000 units reported last year. Despite the recent gains, inventory levels remain below long-term trends for the month.

“Housing supply has been a challenge over the past several years due to the sudden rise in population,” said Ann-Marie Lurie, Chief Economist at CREB®. “Rising new home construction has bolstered supply in rental, new home and resales ownership markets. However, supply improvements vary significantly by location, price range, and property type.”

The months of supply have increased to over two months, representing a shift away from the extremely low levels seen earlier this year and in the past three Novembers, which reported under two months of supply. While these more balanced conditions are promising for potential buyers, many market segments still favour sellers.

Improved supply options have tempered the pace of price growth. Year-over-year gains range from nearly seven per cent for row homes to nine per cent for apartment-style units. The total residential benchmark price reached $587,900, reflecting a year-over-year increase of just under four per cent. This slower growth reflects a shift toward more affordable row and apartment-style units. Seasonally adjusted prices have remained stable over the past four months despite unadjusted prices trending down in line with seasonal patterns.

Detached

Rising sales for homes above $600,000 offset the declines in the lower price ranges caused by limited supply choice. While inventory levels did improve, 85 per cent of the supply was priced above $600,000. Improving supply caused the months of supply to push above two months in November, with higher months of supply reported for homes priced above $700,000 and less than two months of supply for homes priced below that level. This variation within the market is likely to result in different price pressures.
 
The unadjusted detached benchmark price was $750,100, slightly lower than last month but over seven per cent higher than prices reported last year at this time. Year-over-year gains have ranged across the city, with slower growth reported in areas with the most competition from newer homes.  
 

Semi-Detached

There were 173 sales in November, an improvement over last year and contributing to the year-to-date growth of nearly five per cent. This was possible thanks to gains in new listings and higher supply levels. With two months of supply, conditions are not as tight as earlier in the year but still favour the seller, especially for properties priced below $700,000.

As of November, the unadjusted benchmark price was $675,100, nearly eight per cent higher than last November. The pace of price growth has eased over the past several months, primarily due to seasonal factors. Benchmark prices ranged from $926,800 in the City Centre district to $409,300 in the East district of the city.
 

Row

Row home sales improved in November compared to last year, contributing to nearly three per cent of year-to-date gains. Sales have remained exceptionally strong over the past three years as purchasers seek more affordable options. At the same time, new listings have also improved relative to sales, supporting year-over-year gains in inventory levels. Despite inventory improvements, conditions remained relatively tight with nearly two months of supply.

Following steep gains earlier in the year, the pace of price growth has eased. As of November, the unadjusted benchmark price was $454,200, nearly seven per cent higher than last year. Year-to-date average benchmark prices have improved by nearly 15 per cent. Row prices in the City Centre were the highest at $620,000, while the North East and East districts were the only areas to report benchmark prices below $400,000.
 

Apartment Condominium

Sales in November slowed over last year's record high. However, the 429 sales were still 47 per cent higher than long-term trends. New listings for apartment-style units have been on the rise. With 1,482 units available in November, more supply is available now than during the spring, and it is the only sector to see levels rise above long-term trends for the month.

The additional supply caused the months of supply to push above three months and is taking some of the pressure off home prices. As of November, the unadjusted benchmark price was $337,800, down over last month, but still nine per cent higher than last year. Supply has improved for units priced above $200,000, but most gains have been in the $300,000 to $500,000 range.  

Calgary Real Estate Market Report - OCT 2024

Sales gains for homes priced above $600,000 offset declines at the lower end of the market, resulting in October sales that were similar to last year. The 2,174 sales in October increased over September and stood 24 per cent above long-term trends for the month. “Housing demand has stayed relatively strong in our market as we move into the fourth quarter, with October sales rising over last month,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, activity would likely have been stronger if more supply choices existed for lower-priced homes. Supply levels in our market are improving relative to the ultra-low levels experienced last year, but much of the gains have been driven by higher-priced units for each property type. This results in conditions far more balanced in the upper end of the market versus the seller's market conditions in the lower to mid-price ranges of each property type.”

The gains in new listings relative to sales over the past six months have supported inventory gains in the city. As of October, 4,966 units were available, a significant improvement over the near-record low of 3,205 units reported last October. While inventories are starting to reach levels more consistent with long-term trends, the inventory composition has changed as nearly half of all the residential inventory is now priced above $600,000.

Adjustments in supply are helping move the market away from the tight market conditions experienced in the spring. However, conditions remain relatively tight, with 2.3 months of supply and a 67 per cent sales-to-new listings ratio, and the months of supply does vary significantly by price range and property type. For example, detached homes priced below $700,000 are reporting less than two months of supply, while homes priced over $1,000,000 are reporting over three months of supply. This is likely resulting in different price pressures depending on price range and property type.

Overall, the total residential benchmark price was $592,500 in October, over four per cent higher than last October and on a year-to-date basis, averaging over eight per cent higher than last year's levels. The unadjusted benchmark prices did ease slightly over last month due to seasonal factors, as seasonally adjusted prices remained relatively stable in October compared to September.

Please read the full report here.

Rental Rates

• Metro Vancouver continues to record the highest average rent per square foot rate in Canada for the second quarter in a row.

• The lowest average per square foot rental rates among major cities tracked in Canada are in Edmonton despite rates in this market consistently increasing. Overall average rental rates for newer purpose-built rental buildings in Edmonton are up 34 percent from three years ago.

• Metro Vancouver was the only market to experience a decrease in per square foot rental rates, however only a modest decline. Most major markets in Canada experienced an increase in average rent per square foot values in Q1 2024.

• Downtown rental rates in the first quarter of 2024 were the highest in Metro Vancouver at $5.01 per square foot.

• Both Calgary and Ottawa continue to experience some of the strongest growth in downtown rental rates in Canada.

Vacancy

• Vacancy among stabilized projects in the first quarter was the lowest in Metro Vancouver at 1.2 percent with Calgary having the second lowest at 1.5 percent.

• Stabilized vacancy was highest in the GTHA and Kelowna at 2.8 and 2.7 percent, respectively.

• The GTHA continued to record the highest overall vacancy at 10.8 percent for the second quarter in a row as more than 1,700 units have been recently added to the market. Overall vacancy did go down in the GTHA, indicating strong rental demand and the ability to absorb new product in this market.

• Edmonton and Calgary were the only markets where overall vacancy increased in the first quarter of the year, which can be attributed to seven and eight new project launches occurring respectively over the past three months.

(By Zonda Urban)

Elevated lending rates are expected to weigh on sales in 2023, bringing levels down from the record-high in 2022. However, with forecasted sales of 25,921 in 2023, levels are still expected to be higher than the activity reported before the pandemic. Recent growth in migration and employment is expected to help offset the impact of higher lending rates, keeping annual sales activity higher than levels achieved throughout the 2015 to 2019 period.

The growth in new listings in 2022 was not enough to offset the gains in sales and supply levels have remained low, especially for lower-priced product. The higher lending rates are also expected to weigh on listings growth in 2023 as it has become more challenging for a move up buyer. While improved starts are expected to help support supply growth, thanks to the strong migration levels, supply levels are not expected to report significant gains.

The low starting point and limited upward pressure on supply in 2023 is expected to prevent any significant downward pressure on prices as demand normalizes. However, conditions are expected to vary depending on price range and property type. Higher-priced homes are expected to see some downward price pressure as that segment of the market is not experiencing the same supply constraints. Meanwhile, supply declines relative to sales for lower priced properties are expected to continue to support modest price growth. Declines in the upper end of the market are expected to offset gains in the lower end of the market as total residential prices in Calgary are expected to stabilize in 2023.

TOP CONSIDERATIONS FOR 2023:

LENDING RATES With rates not expected to ease until 2024, higher lending rates throughout 2023 are expected to weigh on housing market demand.

MIGRATION Recent gains in migration are expected to offset the impact of higher lending rates, keeping sales activity stronger than pre-pandemic levels.

EMPLOYMENT Recent job growth in industries beyond what was impacted through the pandemic is expected to prevent a more significant adjustment in sales activity.

SUPPLY Low inventory levels especially for lower priced product is expected to prevent widespread price declines in our city.

Please read the full forecast here.

TOP CONSIDERATIONS FOR 2022:

COVID-19 IMPACTS ON ECONOMY AND INFLATION- Supply disruptions caused by COVID-19 are expected to ease in 2022. However, if new variants emerge that delay a full re-opening, this could impact the economic recovery, while prolonging supply challenges and inflationary pressure.

LENDING- The Bank of Canada is expected to increase interest rates in 2022. While gradual gains are anticipated, rates are expected to remain below pre-pandemic levels – low enough to continue to support housing demand, but not at the pace seen in 2021.

POPULATION- The flow of migration will be an important component of sustaining high levels of demand in housing markets.

HOUSING SUPPLY- New construction and elevated levels of listings in the resale market are expected to help add to the undersupplied housing market. The spring market is expected to remain relatively tight, but if supply levels do not start to improve in the second half of the year, this will have significant implications for home prices.

It will take time for the housing market to move out of sellers’ conditions, supporting further price gains this year.

EMPLOYMENT

Following the dramatic decline in jobs in 2020, it is not a surprise that employment levels increased by over four per cent in 2021. Employment gains since September, in particular, were exceptionally strong in Calgary. As of December, employment levels pushed above 833,000, higher than pre-pandemic levels and just shy of peak employment that occurred in June 2019.

Job growth occurred for both full- and part-time positions across a wide range of industries. As of December 2021, sectors such as construction; wholesale and retail trade; finance, insurance and real estate; and professional and technical services not only recovered from the start of the pandemic, but soared to near or above previous highs in the market. These improvements, especially in the professional and technical services sector, will help support further demand growth in the housing market.

Employment gains are expected to continue into 2022, with annual gains forecasted to rise by nearly five per cent. With COVID-19 expected to be mostly behind us, the largest gains in jobs are expected in some of the hardest hit areas, including accommodation and food; arts, entertainment and recreation; and transportation and warehousing. Further gains are also expected in some of our higherpaying industries, including the primary, utilities and manufacturing sectors. The only sector expected to see additional pullback is educational services.

Unemployment rates are also expected to trend down, but to levels that remain higher than pre-pandemic levels. This is, in part, due to gains in the labour force, as more people re-enter the job market. This could also be related to some of the concerns regarding the mismatch between job seekers and job availability.

Some sectors have been struggling to find qualified workers despite higher unemployment levels, somewhat evidenced by rising job vacancy rates. The mismatch would likely also create divergent trends in wages, with sectors experiencing high job vacancies seeing steeper wage growth relative to other sectors. To date, wages have been generally trending up, but not necessarily at the same pace as inflation, impacting growth in disposable income in 2021. As we move into 2022, wages are expected to rise, supporting gains in household income.

Please read the full forecast here.

In 2020, housing markets across the country surprised many with a stronger-than-expected rebound in the second half of the year despite record-high unemployment rates and significant job losses.

Calgary did not hit record-high sales or prices in the third or fourth quarters, but still posted some of the strongest sales relative to the past five years. This was nearly enough to offset the initial losses recorded during the first shutdown caused by the pandemic.

It is expected some of the momentum recorded at the end of 2020 will continue into 2021, fuelled by exceptionally low lending rates and pent-up demand. While sales are expected to rise by nearly five per cent on an annual basis in 2021, persistent economic challenges are expected to prevent stronger growth in our housing market.

Reduction in supply relative to sales is the primary reason the Calgary housing market returned to more balanced conditions by the end of 2020. The pullback in new listings relative to sales activity resulted in inventory levels falling to the lowest levels seen in the past several years.

As we move into 2021, we anticipate new listings will start to rise, as COVID-19 likely caused many homeowners to delay listing their homes. We could start to see some supply come back in 2021, as concerns regarding the spread of the virus ease. Persistently high unemployment rates could also weigh on some existing homeowners who may need to sell their homes.

Growth in supply is expected to offset some of the gains in sales, pushing our market to the upper bounds of balanced conditions and slowing price recovery. However, the price gains that occurred at the end of 2020 are not expected to be eroded and 2021 annual prices are forecasted to improve by over one per cent.

NEW HOME & RENTAL

Slowing economic conditions spread to the new-home sector in 2020. Starts in the city declined by 22 per cent in 2020. Most of the decline was driven by multi-family starts, which had eased by 31 per cent. Slower starts contributed to the decline in new-home inventories from the peak levels recorded early in the year.

The slower activity in 2020 will help prevent further supply pressure to the market over the near term. Starts levels in 2021 are expected to remain low relative to historical levels. This will help slow the supply pressure coming from the new-home market.

Slower migration, combined with completions of new purpose-built rental product, is impacting rental market vacancies and rental rates. As it will take time for borders to open and international migration to return, the rental market is expected to continue to struggle into 2021.

According to Urban Analytics, newer purpose-built rental saw occupancy rates fall, as the addition of new supply created a challenging rental market. They also noted many landlords were providing free rent incentives and rental rate reductions.

With more projects expected to be completed over the next year and migration patterns expected to remain slow, absorption of the rental product will be slow, keeping vacancy rates slightly elevated and ensuring rent incentives will remain persistent in the market.

Low interest rates are likely encouraging many first-time homebuyers to enter the ownership market. However, ample rental supply, rental incentives and significant uncertainty in the economy could reduce any sense of urgency among current renters considering a shift into ownership, potentially preventing stronger sales growth in 2021.

Please read the full forecast here.

The Alberta economy continues to struggle. 2019 marks the fifth year since oil prices first collapsed. Following widening price differentials and continued difficulties getting energy product to market, we saw governments step in with production curtailments. This helped narrow the spread on price, likely preventing further pullbacks, but it also weighed on energy investment activity and overall economic growth.

The continued challenges have caused Alberta to move into the category of slowest growing economy in 2019 compared to other provinces. Shifts to ease curtailments in 2020 and additional transportation capacity are expected to support some economic growth this year. However, global risk will likely create volatility in oil prices and Investment activity is not expected to change, remaining at half the levels that were seen prior to the 2014 oil price crash.

While several mechanisms have been put in place by the provincial government to encourage business investment and support diversification, at the same time, recent budget constraints could impact growth in the public sector. The shifts to encourage business investments will likely take longer to take hold, while the easing in the public sector will be more immediate. The result is an economy that is expected to be marginally better in 2020, keeping housing markets stable at lower levels in 2020.

TOP CONSIDERATIONS FOR 2020:

• A new normal in the market: supply adjusting to slower sales activity, providing conditions that are more supportive to a stable price environment.

• Market improvements are expected to be driven by gains for lower priced product, while easing prices and oversupply persist in the upper price ranges.

• Supply adjustments are expected to continue, helping to eventually push the market toward balanced conditions.

• Prices are expected to stabilize over the year, but remain just slightly lower than last year’s annual levels.

• Stable mortgage rates, previous price declines and job growth should support modest improvements in sales, but these will remain at lower levels.

• Employment risk weighs on the market, which could result in further declines in sales and prices.

Please read the full report here.