We are seeing a normal cooling off of sales and inventory as winter approaches. Slight decline in property values. The exception is detached homes under $600,000, which remains a very hot market segment. Lots of new construction rental properties coming on stream this winter. It will be interesting to see how this effects the investor market for one off sales. Time will tell. We are still having strong net migration to the area which is pushing up the unemployment figures. Without jobs, I would anticipate that we may become less a desirable place to live for many thinking of moving here. The first 6 months of 2025 will be interesting as Alberta absorbs the impacts of Trumps trade wars and protectionism policy’s. My crystal ball is covered over right now as there too many wild card external factors at play. All I can say is buying and selling in the same market is all relative and real estate is generally a long game.
National Policy Changes to watch - Greater Toronto Area (GTA) market conditions
CMHC changes, Housing affordability programs, Bank of Canada decisions generally always takes into account the market dynamics of the 2 biggest market places in Canada - Toronto and Vancouver. It is good to have an understanding of what is going on elsewhere in the country to get a sense of what changes maybe coming and understanding how those changes effect our local market. It is unfortunate that policy changes are usually done nationally as a one size fits all for all regions.
GTA is experiencing a massive reduction in sales and a huge increase of inventory of new Condo apartments and single family homes. The GTA has gone from a large housing shortage to an over supply. Prices are dropping as a result. See graph. New single family home sales for October were 77% below the 10 year average and new condo sales were down 91% from the 10 year average for this time of year. These factors are definitely going to effect policy changes nationally. Affordability is still a major issue for GTA and Vancouver and policy changes to improve that should only help us here in Alberta.
On a positive note for the Greater Calgary Region, we do not have the overbuild of new homes nor have we priced ourselves out of reach of the average home buyer. Home ownership is still 50% less than in GTA or Vancouver. Incomes are about the same on average. This is why we have a positive net interprovincial inflow of people choosing to make Alberta their new home. As long as this positive trend keeps up and there is employment for those moving here, we will continue to be a destination of choice.
Comparison of Toronto and Calgary over the past 20 years to the end of Oct 2024: In 2004, the average new apartment in Toronto GTA cost approx. $250,000. In Calgary it was $195,000. In 2024, this increased to just over $1 million in Toronto GTA and $530,000 in Calgary. A single family detached home in Toronto GTA in 2004 cost approximately $325,000. In Calgary is cost approx $306,000. In 2024 this increased to $1,550,000 in Toronto GTA and $804,000 in Calgary. Thus the “Alberta is Calling” ad campaign targeting Ontario and specifically Toronto GTA by the Alberta Gov’t.
October 2024 Calgary and region real estate sales see slight gains
The Calgary real estate market experienced some slight gains in October after a couple months of decline. The entry and mid level markets still favors the seller. New housing starts have slowed down which means the market should stabilize somewhat as we head into the winter months. US election day is tomorrow and once the dust settles on that influence on our markets, we will get a better picture of the short and medium term outlook.
As I have felt for years now, High River offers the most to gain in increased real estate values. There is still great value for the $$$ there and the town offers a quieter lifestyle. However, if you commute to Calgary or even Okotoks for work, shopping and play, It makes sense to consider total cost of ownership and consider lifestyle in general.
Inventory Grows and Sales drop off - Seasonal Expectations
It’s that time of year again when we normally start to see sales drop off as we head into the fall and winter months. The overall market has moved into a much more balanced state. The days of the crazy multiple offer are diminishing unless of course, it is a hot property and/or priced aggressively. Approximately 38% of all September sales in Calgary sold for list price or higher. 18% of the properties sold for over list price with the assumption being that there were multiple offers on the majority of those sales. It is a good reminder for sellers as our market shifts downward to price fair out of the gate. A few factors effecting sales and inventory over the next could months is the up coming election in the US, world wide events such as the escalation of war in the middle east, oil prices (Alberta) and interest rate drops expected in the near future.
First time buyers should start to see some relief. For everyone else, it is all relative if you buy and sell in the same market.
