Calgary Housing Market and Update

With the return of Donald Trump as the 47th President of the United States, some concerns about Canada’s economy and Alberta’s ability to export its energy products to the world exist.

During his last term however, Calgary and Alberta weren’t harmed and fears were unfounded.  With the TransCanada pipeline in place, carbon tax and production cap defeated, lower mortgage rates, and healthy oil prices and energy demand, 2025 could be a booming year for Alberta and the City of Calgary.  The view of the road ahead is has some concerns with a slowing Canadian economy, rising taxes and unemployment, carbon tax burden, and potential US tariffs.

As interest rates fall, the environment for Calgary Realtors, real estate investors and home builders will improve. Sales and prices fell in 2024 in the Calgary region. The reawakening of our southern neighbors economy will spread prosperity northward.

The Controversy over Canada’s Oil Exports

As home to the world’s largest oil reserves, Alberta has immense, untapped potential. And with the opening of the TransCanada mountain pipeline, more heavy crude can be exported, thus bypassing US strangulation of Canada’s immense wealth generation opportunity. The oppression of Alberta’s energy industry has been intense, but in 2025 could be fully freed. That will have a massive impact on Calgary, Red Deer and Edmonton’s housing markets.

The Trudeau threat to Alberta’s industry is serious and could have big impacts on jobs and tax revenues, which the Federal government depends on. It’s an insane proposal with big economic losses — losses a weak Canadian economy can’t handle.

The Conference Board of Canada believes the Trudeau production cap would reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, end up to 151,300 jobs across Canada by 2030, and shrink GDP from 15.3% to 14.3% by 2040. The issue becomes a serious problem for all Canadians.

Alberta Premier sounds the warning about the unfair imposition, and encourages Alberta to consider withdrawing from Canada. It’s important for all of us to discourage Trudeau’s actions and move to remove him as Prime Minister. An election is the right response.

With the rise of Alberta Premiere Danielle Smith and the demise of Prime Minister J Trudeau in 2025, Alberta will be relieved of the economic damaging carbon tax and emissions cap, enjoy the boost of lower interest rates, US economic growth and the end of damaging regulatory restrictions on oil and gas exports from Alberta. If oil production from Iran and other enemy nations are curtailed by President Trump which is almost certain, oil prices might stay steady or rise, and Alberta could see its earnings grow (Canadian dollar) significantly in this war-charged environment.

A Powerful Economy Not Likely to be Stopped

Hopeful emigrants to Canada will find Calgary’s economy much more promising than Vancouver, Montreal or Toronto.  Calgary’s more diversified economy boosted by oil revenues, is surely going to grow in the next 5 years. In the US with the backlash against costly, inflation-generating alternative energy and oil production restrictions, the stage is set for a return of the US economy and consequently Alberta’s economy.  Wages in Calgary continued to rise with total employment surpassing 1 million people. Alberta’s Premier Danielle Smith announced that 90% of all jobs created in Canada were in Alberta. Wages will support a strong demand for homes and likely continue to push home prices upward.

The issue with Calgary’s residential market is a lack of affordable homes. As buyers return to lower mortgage rates in 2025, the stage is set for strong price gains in all housing types in the city.

As these stats below show, this province is gearing up for good times ahead, except for the struggles of its housing market shortage which could create pains for lower-income workers and home buyers. A slight reduction in mortgage rates and business interest rates should help to keep optimism alive until the change in Federal politics. Currently, interest rates are falling fast (5-year fixed rate is available at 4.19%)

October 2024 Calgary Home Sales Update

Calgary’s phenomenal economic and job growth continued in October as home sales prices continued their upward pace. Sales were 24% above the long term averages for the month.

Calgary continues to prove itself as an exceptional place to live, with a dynamic housing market offering growing opportunities for buyers in higher-priced home segments. Half of all housing inventory is priced about $600,000 up 4% year over year. Unfortunately, lower priced segments are suffering a lack of supply and more pro-housing initiatives are needed.

Price Trend in City of Calgary

The HPI may have been trending downward for sometime driven by the FED anti-Alberta energy regulations, however the outlook has drastically changed. The Trudeau anti-Alberta penalties aren’t done by far, but the 2025 view is still shaping up.

With the defeat of Trudeau and the Liberals, all distribution channels might be reopened for full scale production.  Trump’s favoring of gasoline-powered vehicles and natural gas-powered energy plants is no small matter either. Without rebates, consumers will create all new demand for gasoline-powered cars, enhanced by lower expected gasoline prices. A lower oil price could be more than offset by record oil exports.

However, pre-Trump oil price projections see Brent crude oil averaging $80.55 per barrel this year and $76.61 for WTI oil in 2025.  With lower energy prices, the demand for cheap oil will drive prices upward. The downside projections for oil are all likely politically based. The new Trump and Republican sweep of the Senate and House means regulations are set for deletion in 2025. The outlook for Alberta crude is sunny.

Calgary Home Prices vs Supply

Inventory of Homes Impressive, but Not at Affordable Prices

Listings in the greater Calgary region have grown, but can’t keep up with demand as new residents arrive to work in the oil and gas sector, and in a growing diversified regional economy with higher than average wages. Optimism in the future may drive higher bids and there’s an expectation of lower mortgage rates coming in 2025.

The rise in Inventory (+55%) and new listings (+21.6%) and strong labor market makes Calgary a better alternative than Toronto or Vancouver where average home prices are exceedingly high.

October’s inventory rose to 4,966 units, marking a significant improvement over last year’s near-record lows, with almost half of the available listings priced above $600,000. This shift offers an attractive range of options for newcomers and residents alike, whether they are looking for family-friendly detached homes or luxurious apartments.

In H2 of this year, housing starts in Calgary grew 38% compared to the same period in 2023.  11,600 housing units were added to the market, primarily from multi-unit housing developments, according to the Canada Mortgage and Housing Corp. (CMHC) and for the rental market. During last summer, the average monthly rent for a one-bedroom apartment jumped 17.2% to $1,718, and +16.9% to $2,121 for a two-bedroom apartment, vs summer of 2023.

Home Sales in October

October saw 2,174 home sales, maintaining strong demand levels, particularly for homes priced above $600,000.

“Housing demand has remained robust in Calgary, even as we transition into the fourth quarter,” said Ann-Marie Lurie, Chief Economist at CREB®. “While the supply of lower-priced homes remains limited, we’re seeing a healthier supply of higher-priced properties, offering more choices for buyers looking for quality and value.”

Detached homes remain the most particularly popular choice, with sales reaching 1,071 in October—a 8.1% increase from 12 months ago. The benchmark price for detached homes stands at $753,900, underscoring the city’s value relative to many other major Canadian cities.

In Calgary’s semi-detached and row house segments, inventory has also increased, creating balanced conditions that favor both sellers and buyers in the upper price ranges. Prices have grown 8% year over year to $677,000 while semi-detached homes rose 8.2% to $456,600.

The rising prices might encourage migrants to hasten their move to the Oil and Gas capital of Canada, for great paying jobs and a unique lifestyle.

Apartment and Condominium Market

The apartment condominium market also stayed robust, with rising demand fueled by factors like high rental prices and attractive lending rates. In October, the unadjusted benchmark price dropped slightly to $341,700 from September, yet is still 11.4% higher than last year’s price levels. The additional supply of units priced between $300,000 and $500,000 provides options for professionals, young families, and retirees seeking a modern, urban lifestyle in Canada’s most modern and vibrant city.

Alberta’s Strong Economy Supporting a Health Housing Market

It’s oil and gas that drive Calgary’s housing market, the best in Canada.

According to a CBC report, every $1 rise in oil price brings a $630,000 boost to Alberta. Alberta’s own revenue forecasts are based on a continuous $74 oil price for years which may be too low given the likely economic outlook in the US. If

If President Trump loosens anti-carbon regulation, lowers taxes, tightens US imports, and restricts communist China involvement in the US, and blocking China exports through Mexico, the opportunities for Canadian and Alberta companies looks rosy.

Alberta had a CAD$10.4 Billion dollar surplus for fiscal year 2023/2024.

Alberta is seeing record migration inflows at levels that make the 1980’s surge look pale. Most of the migrants are arriving from Ontario with lesser numbers from BC and Quebec. As of March, the population of the province surpassed 4.8 million, making this province an economic force that supports the rest of the country. Potentially, the population could surpass 5 million by Dec 2025. Growing anti-immigrant policies should support job opportunities for Canadians, lower social costs, and reduce demand for housing from current levels, thus easing home prices and rent prices in Alberta.

However, the strong draw to Alberta could be a catalyst for higher home prices ahead.

Calgary’s population rose beyond 1.6 million in 2023.

An expected avalanche win by Pierre Poilievre and the Conservatives in the next election could bring even more freedoms and economic strength from 2025 onward. The trend is moving back to Conservatives globally as debt-fueling liberal governments are failing. An early Canadian Federal election is also a distinct possibility.

While jobs, incomes and people grow wildly in the province, housing supply is not. In fact, housing starts in 2023 fell. This bodes poorly for an expected jump in population, especially 20 to 40 year old Canadians wanting to start families.

The cities of Vancouver, Kelowna, Toronto, Mississauga, and Montreal. likely won’t see much relief in the coming years either as the will to build remains low.  The fact is that current home owners and real estate investors, and banks don’t want to see home prices fall.  Policies will followed that support higher prices.

Add on inflation, and it’s a continuous headache for all Canadians.

International investors with a long term investment strategy should compare what you can buy in Calgary for $460,000 vs what you’ll get in the Vancouver market or Toronto market or Montreal housing market and you can see the long term investment advantages.  Calgary is a much easier place to do business and buy real estate.

Which are The Best Neighbourhoods to Buy a Home in Calgary?

As a long time resident, I can tell you there are many excellent neighbourhoods, with great schools, shopping, and recreation. All of it is accessible.

If you enjoy exercise, you may find the communities along the Bow River best. There is a cycling/walking trail on both sides and the mountain biking park at Canada Olympic Park is on it too.

If you like beautiful views, Calgary has plenty. The northwest area of Calgary including those communities near Spy Hill, Coach Hill, and Nose Hill Park offer amazing views, some of the Rockies and foothills. Be ready for matching prices. The neighbourhoods on the northwest outskirts of the city offer unbelievable panoramic views of the Rocky Mountains to the west. Expect million dollar prices here. Homes on Spy Hill and Coach Hill offer incredible views of almost all of Calgary and the spectacular downtown skyline.

If water sports like sailing and windsurfing are important to you, Calgary has a number of man made lakes in the south end. The South has the largest selection of homes, with the Northwest next in number.

If you like cosmopolitan, the neighborhoods near downtown Calgary will appeal to you with the shops and walkability. And downtown’s plus 15 walkway system is close by too.  Downtown city centre is where the condos are and virtually everything you need is here on 7th, 8th and 9th Avenue . The Bow River pathway is adjacent and Calgary’s convenient light rail transit can whisk you away to shopping in the south end of the city.

With the recession now largely in the rear view mirror, and with the price of oil rising steadily, homebuyers and property investors will be looking at Calgary homes differently.

With house prices so low, the expectation for buying residential properties in 2018 will improve. For speculators, the Calgary market is tantalizing, given that home prices in Toronto, Vancouver, Los Angeles, Bay Area, New York, and Miami have peaked.

In-migration to Calgary is rising and mortgage rates remain low. Although “made to depress” Canada housing policies will constrain the market, the outlook for Calgary real estate is for growth. The extent of that growth of course depends on the price of oil, incoming energy sector investment, and the value of the Canadian dollar vs the US dollar.

Economic Predictions for Calgary

If oil continues to rise steadily in price, Alberta stands to recover economically. Businesses have pared down their costs and are better able to profit from growth. Although not officially a big component of the rosy Canadian economic forecast, Alberta and Calgary are keys to Canada’s future.

 

Note: the preceding post is not meant as specific investment advice, but rather as a comparison of real estate investment or home buying opportunities. Please ensure you discuss all investments with a licensed professional.