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Calgary's tight housing market is expected to ease in 2024 despite an expected slowdown in immigration rates to the city, according to a report from the Calgary Real Estate Board that predicts housing price growth will accelerate to 6.56 per cent next year probably not relaxing significantly.
The influx of new Calgarians is identified as a distinct “risk” in CREB’s 2024 forecast report, saying it will contribute to the declining availability of resale properties in the region.
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“The new construction sector has responded to the recent increase in immigration, but ultimately construction levels will need to become more in line with immigration levels before we see a significant adjustment in supply,” the report said.
For five consecutive quarters, net migration exceeded 30,000 people per quarter, reaching a record 56,306 in the third quarter of 2023. Alberta is experiencing an unprecedented increase in both international and interprovincial migration, with 45,194 people arriving from other provinces between the first quarter and third quarter of 2023.
Although interprovincial migration is expected to slow in 2024 and Calgary's population growth slows from 4.7 per cent in 2023 to 3.6 per cent in 2024, increases in recent years will likely keep demand high .
“Despite expected slower growth, population growth remains high and is expected to continue to drive strong demand for housing in 2024,” the report said.
CREB chief economist Ann-Marie Lurie said the increase in migration was posing challenges to the property market, particularly in the lower-priced property segment.
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“The challenge has been limited supply, particularly for affordable homes with the strongest demand. This resulted in a significant increase in prices, with the largest increases occurring in our lowest-priced homes.”
In 2023, Calgary's benchmark home price increased 5.77 per cent year-over-year, while total sales fell 7.6 per cent. Inventory also saw a sharp decline of 26 percent, resulting in only 1.3 months of market availability.
In the single-family home segment, the inventory averaged 1,474 units, almost 48 percent below the long-term trend. Despite a decline in sales, the significant decline in inventory kept the market firmly in sales territory throughout the year.
According to the report, these continued stringent conditions resulted in price increases across all districts, with the most significant increases occurring in the most affordable areas of the Northeast and Eastern districts. Calgary's annual benchmark detached property price rose nearly eight per cent to reach a new record high of $675,783.
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Despite the expected increase in housing starts and home listings this year, Lurie assures that sellers will maintain their market dominance.
“Conditions are not expected to be as severe as in 2023,” Lurie said, “but supply growth takes time, and seller market conditions are expected to continue through the spring, resulting in another price increase in 2024.”
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