Will Calgary’s Real Estate Market See a Boom in 2024?

What’s happening in the Calgary housing market in 2024? It’s a big question, especially for anyone looking to buy or sell. Calgary’s real estate market has seen some exciting changes recently. Home prices are going up, but sales are slowing down. With rising interest rates and a growing population, the market is shifting. So, is Calgary still an excellent place to invest in real estate?

While the market remains strong, things are changing. Calgary’s housing market is still solid, but we see signs of a more balanced market. Let’s dive into what’s going on and what to expect.

How Is Calgary’s Housing Market Performing?

In July 2024, the average home price in Calgary hit $588,600, an 8.0% increase compared to last year. This price growth has been steady across different types of homes. Here’s a quick look:

• Single-family homes now sell for an average of $691,400, up 10.3% from last year.
• Townhouses have increased by 12.9%, reaching $469,800.
• Condos have seen the most significant jump, with prices rising 15.5% to an average of $351,500.

Even though prices are rising, sales are slowing down. Home sales dropped by 10% year-over-year in July. Fewer homes are being sold, but the ones that are selling are going for higher prices. This could be due to higher mortgage rates and fewer affordable homes.

Why Are Home Prices Still Rising?

If sales are slowing down, why are prices still going up? The main reason is supply and demand. Calgary has been dealing with a low supply of homes for a while. However, July 2024 brought some relief. Inventory levels rose slightly, particularly for homes priced over $600,000.

The number of available homes topped 4,000 units for the first time in two years. This slight boost in supply has slowed price growth, but prices are still higher than last year—about 8% higher. The added inventory is helping to cool the market a bit, shifting it from a strong seller’s market to something more balanced.

Another factor is that Calgary is still more affordable than big cities like Toronto or Vancouver. That’s attracting buyers and investors looking for better value in real estate.

How Are Different Types of Homes Doing?

Let’s break down how each home type performs in Calgary’s real estate market.

Single-Family Homes

Single-family homes are still in demand. The average price is now $691,400, up 10.3% from last year. But even though prices are rising, sales have slowed. The number of single-family homes sold dropped by 8%. One reason could be the lack of homes priced under $600,000. People are looking for affordable homes, and there aren’t many in that price range.

Townhouses and Multiplexes

Townhouses and multiplexes have seen strong price growth, too. The average price for a townhouse is now $469,800, up 12.9% from last year. These homes are a good option for buyers who want more space but can’t afford a single-family home. The demand for townhouses remains high, but sales have slowed down a bit like other segments.

Condos

Condos have seen the biggest price increase, jumping 15.5% over the past year. The average condo now costs $351,500. However, condo sales have dropped by 15% year-over-year. This is mainly because there are fewer lower-priced condos available. The condo market is still strong, but the limited supply is causing some buyers to hold off.

How Are Interest Rates Affecting Calgary’s Market?

Interest rates are one of the most significant factors currently influencing the housing market. The Bank of Canada cut interest rates by 0.25% in July 2024. While this rate cut relieves buyers, mortgage rates are still higher than before the pandemic.

For every $100,000 in mortgage balance, a 0.25% rate change can affect monthly payments by about $15. So, even though rates have decreased a little, buying a home is still more expensive than a couple of years ago. That’s one reason why some buyers are holding back.

The full impact of the rate cut hasn’t been felt yet. Experts believe it could help boost demand in the coming months, but many buyers are waiting to see if rates drop further.

What Buyers Should Expect in 2024

Calgary’s housing market is shifting, but it’s still strong. Prices are up, but the market is slowly balancing out. For buyers, this could mean more choices in the months ahead, significantly if inventory rises.

If you’re considering buying a home in Calgary, keep an eye on interest rates and available listings. The Bank of Canada has already cut rates, and further cuts could make buying more affordable. The market is changing, but Calgary’s strong economy and relative affordability mean it’s still a solid place to invest in real estate.

FAQs

Are home prices in Calgary still rising?
Ans: Home prices in Calgary have continued to rise in 2024. The average home price has increased across various property types, including single-family homes, townhouses, and condos, with some segments seeing double-digit growth.

Why are home prices going up if sales are slowing?
Ans: Prices are rising primarily due to low housing supply and steady demand. While sales are slowing, the overall inventory has slightly increased, particularly for homes over $600,000. This added supply has helped temper price growth but hasn’t been enough to reverse the upward trend.

How is the condo market performing?
Ans: The condo market has experienced the largest price growth, though sales have slowed. Fewer affordable condos are available, which has caused some buyers to hesitate despite the overall price increase.

How are interest rates impacting the market?
Ans: Interest rates remain a critical factor in the market. Although the Bank of Canada cut rates slightly, mortgage rates are still higher than pre-pandemic levels, making home purchases more expensive. This has caused some buyers to hold off on making decisions.

Is Calgary still an excellent place to invest in real estate?
Ans: Yes, Calgary remains a solid real estate market. Its relative affordability compared to other major Canadian cities, along with a growing population and stable economy, makes it a solid place to invest in real estate.