In a scenario with higher mortgage rates and lower inventory, Calgary’s real estate market continues to slow down but remains active. In its most recent report, the Calgary Real Estate Board reported a -0.51% drop in sales for all home types; however, buyers are reconsidering their options rather than refraining from buying.
If you’re in the market for a new real estate property in Calgary and you want to know what to expect from the last quarter of 2022, here’s what the data is telling us.
Canadian Real Estate Market is Cooling Down
While historically hot real estate markets are expected to have a steeper decline in prices towards the end of 2022, experts say that all markets won’t experience an extreme price decrease.
The most recent TD Economics report predicts housing prices could fall as much as 25%, mainly driven by B.C and Ontario. This decline is expected to be mild in Alberta and Quebec, while in Manitoba and Saskatchewan the experts project a better hold up in prices.
This forecast is considered a correction and not a market crash, due to the combination of several factors:
- The Bank of Canada is expected to reduce its interest rate increase after the last quarter of 2022;
- As an aftermath of the pandemic, many Canadians have built an unusual savings reserve, providing greater guarantees of mortgage payments. This is even with higher interest rates and the prospect of a recession in 2023. This same situation may attract home buyers back to the market in the coming months, due to the lower prices;
- The sector of the population (aged 25-39) most interested in home ownership is growing which drives demand.
The Calgary Housing Market May Be Slowing Down, But Stays Healthy
With historically more affordable home prices, the real estate market correction is a little different in Calgary. Although both sales and listings have declined since June, especially in detached and semi-detached homes, buyers are shifting their interest to condos and townhomes, resulting in a sales increase of these types of homes by 65% and 50% respectively, compared to August 2021.
The Bottom Line
Although home listings remain on the market for longer periods of time, local realtors consider Calgary it’s still a seller’s market, because the deals are not closing at deep discounts. And while many buyers are opting for condos and row houses, many others will stay out of the market waiting for better conditions for detached and semi-detached homes.
Ultimately, purchase decisions will vary greatly depending on each investor’s case, and their goals buying a real estate property in Calgary. We remain optimistic about the real estate market in Calgary toward the end of 2022.
