Calgary housing market draws home search app as affordability worsens

By
Millicent Wong
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0
213
financial contribution

  1. property

Rising prices, low supply and high demand, and bidding wars made Calgary the “natural next step” for HouseSigma

Published on July 26, 2023 • Last update 2 days ago • 4 minutes reading time

The Calgary real estate market set a new sales record in June, with benchmark prices rising for the sixth straight month. The Calgary real estate market set a new sales record in June, with benchmark prices rising for the sixth straight month. Photo by Azin Ghaffari/Postmedia

The lack of available real estate in Calgary, coupled with rapidly increasing costs and overwhelming demand, has put the dream of owning a home out of reach for many people, including Farah Meghani.

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Meghani has called Calgary home for eight years, has a steady job in the oil and gas field and is longing for a place to call her own. Beyond simply looking for a place to live, she sees home ownership as a crucial investment in her future.

“As an immigrant, my mother lives elsewhere and I live elsewhere,” she said. “I want her to come here sometime. But the thing is, right now I can’t afford anything a little bit bigger.”

Despite her unwavering determination over the past two years, Meghani’s quest to become a homeowner has met with disappointment due to the city’s persistent and unforgiving housing market.

In June, the Calgary real estate market set a new record for sales, with benchmark prices rising for the sixth straight month on persistently low inventories. Sales hit 3,146 units, slightly up from the previous month, mostly due to a 48 percent increase in condos, according to data from the Calgary Real Estate Board (CREB).

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New listings rose from the previous month but remained 36 percent below a year earlier and were at their lowest level in nearly two decades in June. Average prices fell slightly, but median and benchmark prices rose 0.59 percent and 1.38 percent, respectively.

“Demand for housing remains resilient, supported by a healthy labor market and increased levels of migration, helping to offset the impact of higher lending rates,” CREB chief economist Ann-Marie Lurie said in a July 4 report. “While we have seen recent improvements in new listings, especially condominiums, this is not enough to bring about a significant change in the low stock situation in our city. Although the number of new builds is increasing, it will take time to see their impact on supply.”

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A house under construction in Calgary. A house under construction in Calgary. Photo by Jim Wells/Postmedia

The situation in Calgary’s real estate market has attracted significant attention from both the public and private sectors, leading to the emergence of innovative solutions and increased support for those seeking home ownership, including Meghani, who remains optimistic and determined in her quest stays after buying a house.

Michael Carney, director of business development at HouseSigma Inc., whose real estate intelligence smartphone application was originally launched in Toronto in 2018 and later expanded to Vancouver, spoke enthusiastically about the company’s recent foray into Calgary.

“The Calgary market has been very, very active,” he said. “There are many economic opportunities in Calgary that are attracting Canadians to the area and this made it a natural next step for HouseSigma to be our next expansion effort. When we see a very active market with lots of offers and bidding wars, additional information can be of great benefit (to both homebuyers and investors).”

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So far, Meghani has explored three properties through HouseSigma.

“You can filter everything based on what you want and what you don’t want. And then simply make an appointment to view the property. It’s so simple,” she said. “If you don’t have a computer, that’s fine. You do everything on your phone anyway.”

When we see a very active market where there are a lot of offers and bidding wars, having additional information can be of great benefit

Michael Carney, House Sigma

Meghani’s property search with HouseSigma went relatively smoothly, but she now faces the challenges that come with rising interest rates.

“It’s difficult to afford anything on a single income with rising interest rates and the housing market these days. So I don’t think it’s a good time to buy,” she said. “Maybe I hope that everything will calm down in the next two or three years.”

On July 12, the housing market suffered another setback when the Bank of Canada hiked the overnight rate by another 0.25 percent to 5 percent. At the beginning of 2022, the rate was 0.25 percent.

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In addition to rising interest rates, competition for housing has increased due to significant outflow of people from Toronto and Vancouver and high rates of immigration, Meghani said.

Carney said sentiment is also reflected in the app’s data.

“We are seeing a lot of interest as demand for Calgary is increasing as affordability concerns have impacted the housing market in Toronto and Vancouver,” he said. “Even though the interest rate is having a nationwide impact on the market, we are seeing increasing inter-provincial migration to Calgary.”

Carney said rising interest rates caused activity to drop sharply in both Vancouver and Toronto, but Calgary also experienced a brief slowdown for a few months. Still, he said the situation in Calgary has improved dramatically.

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In general, transparency, accessibility and affordability are major challenges in the Canadian real estate market, Carney said. HouseSigma provides consumers with real estate data to give them the knowledge they need to make informed decisions. This approach benefits buyers and investors, and also helps real estate agents understand their customers’ preferences and better align their expectations.

But despite the benefits and availability of tools like HouseSigma, affordability remains the deciding factor for millennials like Meghani.

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“I wanted to see what options I had in the market, and then the whole market exploded and I was like, ‘okay, well, I can’t really buy right now,'” she said. “So I’m going to take a step back and see if I can save up some more and put that down.”

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