Looking at The Year Ahead
Calgary Real Estate and Rental Market Update
January 1, 2023 - Written by Jamie Palmer, President/Broker of Power Properties
2022 was a year for the record books!
Calgary started the year with an incredibly tight sales market leading to bidding wars, and homes selling for hundreds of thousands of dollars over the asking price. Seven consecutive interest rate hikes took the wind out of the sales market by later-summer-early-fall. We are currently in what has been described as a “nobody’s market”. There is still very low inventory, which has prevented prices from falling significantly beyond expected seasonal declines; such low inventory would ordinarily create a seller’s market, but due to the speed of the interest rate hikes, buyers are finding homes the least affordable they have ever been, preventing a surge in prices. So it’s not a seller’s market and it’s not a buyer’s market and it’s not a balanced market… it’s a “nobody’s market”
The high cost of purchasing a home right now is forcing more Canadians than ever to remain, renters. This in turn has pushed rents up, often with double-digit percentage year-over-year increases.
So where does that leave us for 2023?
The federal government has pledged to bring in over four hundred thousand new immigrants to Canada next year alone. This will undoubtedly put even more pressure on the housing market both for rent and sales, as demand is already vastly outpacing supply. As new immigrants look at where to settle, they find that Quebec doesn’t want them, the GTA is too expensive, as is the lower mainland of B.C., leaving them to look at the prairies where Calgary with its highly rated standard of living shines (sorry Regine, Saskatoon, Winnipeg, and Edmonton, always the bridesmaids never the bride). Alberta saw a net increase of almost 60,000 people between July and September of this year, more than any other year since 1951 when the data was first recorded.
With the above in mind, it is largely expected that Calgary’s house prices and rents will continue to increase through 2023, with some predictions showing the average detached house price in Calgary will hit $700,000 (at the time of writing it is $641,000). The average rent for a detached house in Calgary currently sits at $2000/month, up from $1539 in 2021. That’s a 30% increase year-over-year!
We expect to see continued strong demand for affordable apartment units, townhouses, and an increased prevalence of roommates and cohabitation as renters try to cope with increased housing costs.
How can you capitalize on this?
After all, ideas mean nothing without execution. I would encourage you to get your financing pre-approved, your cash lined up, and talk to one of Power Properties' investment specialist Realtors, so you are in a position to jump on hot properties as they come available; sales inventories typically increase in spring as does the demand for rental properties, so don’t delay.