Calgary Housing Market Report
- A lack of supply in the Calgary housing market pushes home prices higher, while unaffordability pushes consumers toward lower-price options.
- Calgary housing market is losing affordability fast.
- At 2,738, Calgary’s number of home sales saw a 13% yearly decline.
- The benchmark home price rose 8.5% year-over-year and 0.4% monthly to $608,000.
- The average home price rose 13% to $623,245.
- Detached home average price increased by 13.6% year-over-year to $829k.
- Semi-detached home average price increased by 6% year-over-year to $666k.
- Townhouse average price increased by 17.1% year-over-year to $479k.
- Condo apartment average price increased by 18.4% year-over-year to $357k.
- July 27, 2024 Update: Today’s Lowest mortgage rate in Calgary is 4.49% for 5-Year Fixed.
Calgary Housing Market Overview
Average Prices
The average home price in Calgary for June 2024 was $623,245. That is 13% higher than last June’s average sales price and 1.7% higher than the previous month's. Detached home average prices were $829,310, which shows 14% yearly growth and a 0.8% monthly increase. Semi-detached home average prices were $665,584, exhibiting a 6% annual growth but a 5.3% monthly decline. The average townhouse price was $478,850, 17% higher than June 2023 and 1% higher than May 2024. Apartment average prices were $357,432, 18% higher than June 2023 and 2.4% higher than May 2024.
Average home prices do not show the true extent of price changes because of the substitution effect. When changes in home prices or mortgage rates reduce consumers' buying power, they shift their purchases to more affordable options. As a result, the average price can under-represent house price inflation. Moreover, luxury homes have an outsize effect on average prices, and fluctuations in the number of luxury home sales cause fluctuations in average prices.
There is a change in the property types that Calgary buyers are interested in. Over the past three years, the composition of home sales in the Calgary real estate market shifted toward condos and townhouses while shifting away from detached houses.
Sales Numbers and Benchmark Prices
The benchmark home price rose 8.5% year-over-year and 0.4% monthly to $608,000 in Calgary. In June 2024, 2,738 homes changed hands; this number has declined 13% compared with last June. 3,798 new listings in Calgary decreased by 3.6% year over year (YoY).
The sales-to-new listings ratio (SNLR) is 72%, which is slightly different from last month's 71%. This SNLR signals a seller's market during June 2024. Inventory increased 9.2% year over year to 3,787 units. Inventory stands at 1.4 months of home sales compared with 1.1 over the past month.
Calgary home prices have fluctuated over the past 19 years, yet they have shown healthy appreciation with a Cumulative Annual Growth Rate (CAGR) of 5.5% from January 2005 until April 2024.
In June 2024,
- The benchmark price of a detached home in Calgary increased 12% year-over-year to $767,600 and increased 0.8% month-over-month.
- The sale of 1,278 detached homes shows a 16% year-over-year decrease. Currently, inventory stands at 1.4 months of detached home sales.
- Semi-detached benchmark home prices grew 12% year-over-year to $686,100, 1.2% higher than in April.
- Sales of semi-detached homes decreased by 2.9% YoY, reaching 233 units. Currently, inventory stands at 1.3 months of semi-detached home sales.
- Benchmark townhouse prices grew 17% YoY and increased 0.5% MoM to $464,600 for June 2024.
- The number of row houses sold decreased 17% YoY to 436 units. Currently, inventory stands at 1.1 months of row home sales.
- Benchmark apartment prices are up 17% year-over-year and 1.2% month-over-month to $344,700.
- The number of apartments sold decreased by 7.7% YoY to 791 units. Currently, inventory stands at 1.5 months of apartment home sales.
Median Prices
As another price indicator, we can also look at the median prices for Calgary houses, increasing by 12% yearly to $570,972. Calgary median home prices are 1.5% higher than in May 2024. Median house prices for detached houses reached $728,500, increasing by 12% compared with last June. Median prices for semi-detached houses reached $599,900, rising by 7.4% annually. Median prices for row houses and apartments reached $465,000 and $335,000, increasing by 18% and 20% annually.
Context
Homes in Calgary are much more affordable than homes in Toronto and Vancouver. At the same time, Calgary is slightly less affordable than Montreal's larger housing market. Yet, prices have risen over the past four years, and affordability is declining fast in Calgary. This trend would make life for renters and future homeowners more difficult and reduce economic dynamism and productivity growth in the largest population center in Canada’s prairies. Fortunately, there are plans for relaxing zoning restrictions and allowing Calgary residents to build homes and live where they desire to develop and live. Implementing these plans is necessary to keep Calgary a desirable destination for Canadians looking to move and realize greater opportunities.
Supply and Demand
To understand the state of the Calgary real estate market, it is instructive to consider changes in the Calgary population and the number of housing starts.
Calgary Population Chart
As of the last estimate, Calgary’s population is 1,682,509, growing at a 3-year annualized rate of 3.3%.
As of the 2021 census, Calgary had 594,513 private dwellings, of which 563,440 (95%) were occupied by their regular residents. The population in 2021 was 1,540,242. Thus, on average, 2.7 people were living in each private dwelling. The population is expected to grow by around 55,500 people each year. This translates into a requirement of around 20,600 new dwellings per year. New construction of an average of 13,500 houses per year is not keeping up with the increase in population.
Calgary Housing Starts Chart
Over the past five years, Calgary builders have started 13,500 units per year on average.
Macro Economics Trends
Over the past three years, monetary policy has been a primary driver of Canadian housing markets. Housing markets were booming during the pandemic as the monetary base expanded faster than ever. During the second half of 2022, the restrictive monetary policy of the Bank of Canada put a break on the housing market activity by increasing interest rates in Canada. During 2022 and 2023, the Bank of Canada raised interest rates to subdue CPI inflation.
On the one hand, higher interest rates reduce the present value of the rent, which can be earned from a home, thus reducing the house's value. On the other hand, higher interest rates mean higher Canadian mortgage rates, which result in higher mortgage payments and reduce home affordability. Therefore, the average Canadian home price peaked in February 2022 and decreased 25% into the January 2023 trough.
In January 2023, BoC paused its rate hikes, and the market started looking forward to rate cuts. The seasonal effect of spring and expectations for decreasing mortgage rates fueled a 2023 resurgence in the housing market. Canada’s average house prices rose 19% from its January low by June 2023. In June and July 2023, BoC raised rates again. As a result, Canada's housing markets softened again, and prices declined from June 2023 until November 2023. Now, in the first half of 2024, rate cuts are started and more are expected over the next few months. Average Canadian home prices were once again trending higher from November 2023 until April 2024. Over the past couple of months, monetary policy is losing its prominent role in determining the direction of Canada’s housing market.
Over the past two decades, municipalities have been keeping the supply of houses down, and a firm belief has been created that southern Ontario and BC home prices can only go up. Investors were borrowing as much as they could to purchase more houses. This gave mortgage rates a prominent role in determining the direction of the Canadian housing market. However, the fluctuations over the past 2 years might start to break the belief that house prices can only go up. Home buyers might become more disciplined about how much they are willing to borrow, which might reduce the importance of monetary policy in the housing market.
Though monetary policy affects all of Canada, it is essential to remember that housing markets are local phenomena. The Ontario housing market and the British Columbia Housing market mainly influence the average Canadian home price. These two markets became bubble territory when expansionary monetary policy offered almost free money to real estate investors and speculators after the global financial crises, especially during the pandemic.
In contrast, the Alberta real estate market avoided a pandemic bubble and remained relatively affordable. The home price in the Calgary region is 35% higher than ten years ago (compared with a 28% rise in CPI). Over the same period, Toronto and Montreal's home prices rose by 112% and 94%, respectively. This price rise means the cumulative annual growth rate (CAGR) over the past ten years has been 3.1% for Calgary. This reasonable growth suggests that the downside risk in the Calgary housing market is limited. However, one might argue that Calgary homes were overpriced in 2014.
Alberta, in general, and Calgary, in particular, enjoy more economic freedom (and arguably more natural resources) than many other parts of Canada. As a result, Alberta offers some of the highest incomes and wages among Canadian provinces, and Calgary offers some of the highest incomes and wages among Canadian cities.
The Alberta housing market, in general, and the Calgary housing market, in particular, have avoided a housing bubble over the past few years. Thus, the Alberta housing market is far more affordable than the Ontario or British Columbia Housing market. Similarly, the Calgary housing market is far more affordable than other large Canadian housing markets, namely the Toronto housing market and the Vancouver housing market. The strong job market and relatively affordable housing markets resulted in interprovincial migration toward Alberta. This migration is another tailwind for the Calgary housing market.
Home Prices in Calgary
Calgary Housing Market Statistics for All Property Types in June 2024
Average Sold Price and MLS HPI Benchmark Price
Total Transactions and New Listings
Property Type Distribution
Market Overview for Detached Homes in June 2024
Average Sold Price
Transactions
Market Overview for Semi-Detached Homes in June 2024
Average Sold Price
Transactions
Market Overview for Townhouses in June 2024
Average Sold Price
Transactions
Market Overview for Condo Apartments in June 2024
Unlike other major metro areas in Canada, such as Toronto real estate or Vancouver real estate, as recently as two years ago condo apartments were a relatively small part of Calgary's real estate market. Two years ago, they made up close to one-seventh of total home sales and a much smaller proportion of sales volume in dollars due to their lower prices. Currently, they constitute close to one-third of homes sold in the Calgary real estate market.
Average Sold Price
Transactions
Calgary Region Breakdown by Region for June 2024
Glossary and Definitions
MLS® HPI: The MLS® Home Price Index (HPI) is an index by the Canadian Real Estate Association (CREA) that tracks the prices of homes in a neighborhood. It allows Canadians to quickly compare home prices across Canada and between periods of time without having to account for specific features of a property. Unlike market prices, which can fluctuate from month to month based on seasonal dynamics, the HPI provides a stable view tracks trends across a longer period of time. The HPI is reviewed every year in May to adjust for changes in the real estate marketplace.
MLS® HPI Benchmark Price: The MLS® Home Price Index (HPI) Benchmark Price is the HPI translated into a real-world price number.
Strata Insurance: Strata insurance is insurance used by a strata like a condominium to covers damages to common areas and assets and liability to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. The insurance can cover:
- Buildings and structures associated with the strata including common areas such as the roof, parking garages, driveways, gyms, pools, etc.
- Liability for any property damage or bodily injury suffered on strata property
- Any fixtures that are part of the "standard unit" or original construction of each unit
Strata insurance does not usually include personal items and appliances that are part of a condo unit. It also does not cover the damages made by individual unit owners, such as in the case of water damage caused by a unit owner. These are usually covered by personal condo insurance.
Property types
Detached home: A detached home is your standard single-family home. It is a residential building that stands alone and is separately titled or legally a single unit.
Semi-detached home: A semi-detached home is similar to a detached home, except it shares a wall with another home. This pair of homes must make up an independent building and each should be separately titled or legally two separate units. There can only be two homes in a semi-detached building.
Townhouses: A townhouse is the middle between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units that have their own land and may be attached to other units. However, like condo apartments, they typically have to pay co-ownership fees for maintenance and may share some common features with their neighbors.
Condo apartment: This category includes all apartments and condominiums. These are complexes of residential units with common areas such as hallways, parking lots, stairwells, etc. They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the lot (the land of the building) where access is reserved for only one owner or occupant. There can be privately owned units and spaces inside the building.
Plexes are multi-story buildings with two to four individual units, usually one on each floor. They are a mainstay in Montreal and other cities in Quebec. Each unit is usually individually accessible via an external entrance with higher floors connected by staircases.
Property Classes
Freeholds: A freehold is any property where the owner owns both the house and the land it is built on. Common freehold property types include: detached, semi-detached, some townhouses, and farmland.
Condominiums: A condominium or condo is any property where the owner owns the home (or unit) but shares ownership of the land and other improvements with a condominium corporation. Common condominium property types include condo apartments and some townhouses.
Leasehold: Leasehold describes the situation where different entities own the land and the structure built on the land. Owner of the buildings has leased the land and pay rent to their landlord while owning the building on the land.
Housing Markets Across Canada
Data sourced from the Calgary Real Estate Board (CREB) and the Canadian Real Estate Association (CREA). Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.