Calgary's real estate roller coaster could finally be about to level out

Apr 27 2023, 7:18 pm

After some huge price gains last year, Calgary’s real estate market is expected to flatten out a bit, according to a new report.

Canada Mortgage and Housing Corporation’s (CMHC) latest housing outlook says the Calgary price peaked late last year.

They say the decline in Calgary home prices is expected to bottom out this spring before rising slightly again throughout the rest of the year.

CMHC says Calgary’s real estate market has shifted from single-family detached homes to lower-priced condos and that is contributing to the price dip.

The report states that sales activity and new home construction will stay relatively for the rest of 2023 as well. Their reasoning for this is expensive financing is making it more difficult to start these projects and is slowing the demand for single-family homes.

The slowdown in house price growth in 2023 will largely be due to a shift in the types of homes being bought and higher mortgage rates.

One of the factors that is going to keep the housing market going in Calgary is people moving here from other provinces and countries. The report feels like that will help out the demand for the rest of this year through 2025.

That shift is expected to cause real issues in the rental market. CMHC says people coming from outside the province generally start out in the rental market. And with mortgage rates continuing to rise they are expecting more people to stay in the rental market for a bit longer.

Calgary home prices

Canada Mortgage and Housing Corporation (CMHC)

Long term the average Calgary home price is expected to rise again in 2024 into 2025.

They say that people shifting back to in-person and hybrid work will support demand for inner-city multi-family units. And as mortgage rates decrease in 2024 and 2025, demand for single-detached homes will return, leading to that projected price hike.

The report warns that this price increase may erode affordability, especially for families seeking larger homes.

Nationally, the report states housing prices are expected to decrease but high mortgage rates are expected to make homeownership less affordable for the rest of the year.

CMHC expects supply gaps in Canada’s most expensive and supply-constrained housing markets Vancouver and Toronto will continue as more people make their way to Canada.

Peter KleinPeter Klein

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