2022 saw record-high sales and double-digit price growth

December sales eased, however, slowing sales over the second half of 2022 were not enough to offset earlier gains as sales reached a record high of 29,672 units in 2022.

Over the past several months, the pullback in sales was also met with a significant pullback in new listings, causing further declines in inventory levels. As of December, there were 2,214 units available in Inventory, making it the lowest level of inventory reported for December in over a decade.

“Housing market conditions have changed significantly throughout the year, as sales activity slowed following steep rate gains throughout the later part of the year,” said CREB^® Chief Economist Ann-Marie Lurie. “However, Calgary continues to report activity that is better than levels seen before the pandemic and higher than long-term trends for the city. At the same time, we have faced persistently low inventory levels, which have prevented a more significant adjustment in home prices this year.”

Benchmark prices eased to $518,800 in December, down nearly five percent from the peak price in May but almost eight percent higher than last December. While prices have trended down annually, they remain over 12 percent higher than last year’s levels.

The housing market in 2022 generally outperformed expectations both in terms of sales and price growth.

Detached
The detached market has felt most of the impact of higher rates as a pullback in sales in the year’s second half contributed to the year-to-date decline of over seven percent. While there have been some gains in new listings over the last quarter, much of the growth has occurred in the market's upper-end, supporting more balanced conditions. However, supply levels for lower-priced homes remain low relative to the sales activity, causing that market segment to continue favouring the seller. Overall, the detached market has seen activity shift away from the strong sellers’ conditions reported earlier in the year.

Prices in the detached market have trended down in the second half of the year, as the December benchmark price of $619,600 has eased by just over four percent from the June high. The recent adjustments have not erased all the earlier gains, as benchmark prices reported an annual gain of over 14 percent. Annual price growth has ranged from a high of 19 percent in the South East, North and North East districts to a low of nearly eight percent in the City Centre.

Semi-Detached
Further declines in sales this month contributed to the year-to-date sales decline of nearly three percent. While sales have eased relative to last year’s record levels, activity is still far stronger than long-term trends and levels reported prior to the pandemic. At the same time, new listings have been trending down for this property type, keeping the inventory and months of supply relatively low compared to historical levels. 

While conditions are not as tight as earlier in the year, there has been some downward pressure on prices. The monthly benchmark price peaked in May of this year and has eased by nearly four percent since then. However, on an annual basis, benchmark prices remain nearly 12 percent higher than in 2021. The North district reported a higher annual price gain of over 18 percent.

Row
Significant reductions in new listings weighed on sales over the last few months of the year. Despite recent shifts, annual sales in the city reached a new record high, with 5,153 sales in 2022. Not only was it a record year, but sales were nearly double long-term trends. Higher lending rates are driving more purchasers toward the more affordable row options. While new listings were still higher than last year’s levels on an annual basis, the recent pullback combined with relatively strong sales has caused inventory levels to fall.

As of December, inventory levels were at the lowest since 2013. This has ensured that this segment of the market continues to favour the seller. While prices have eased by just over one percent from the June peak, overall year-to-date prices are nearly 15 percent higher than last year.

Apartment Condominium
Unlike other property types, apartment condominium sales continue to rise above the previous year’s levels throughout the year. This caused year-to-date sales to rise by 50 percent to 6,221 units, a new record high. Demand for affordable product, along with renewed investor interest thanks to rental rate growth, helped support sales growth. Gains in this sector were also possible thanks to the growth in annual new listings. However, like other sectors, the increase in new listings was not enough to outweigh the sales growth, and inventory levels trended down to levels not seen since 2013.

After several years of being oversupplied, the shift to tighter conditions supported annual price gains of nearly nine percent. While price gains occurred across every district, city-wide prices remain well below the previous highs reached back in 2014.

Sales remain stronger than pre-covid levels

October sales eased compared to last year’s levels, mostly due to slower activity in the detached sector. However, with 1,857 sales this month, levels are still stronger than long-term trends and activity reported prior to the pandemic. Year-to-date sales have reached 26,823 and with only two months to go, 2022 will likely post a record year in terms of sales.

“Calgary hasn’t seen the same degree of pullback in housing sales like other parts of Canada, thanks to persistently strong demand for our higher density product,” said CREB® Chief Economist Ann-Marie Lurie. “While our city is not immune to the impact that inflation and higher rates are having, strong employment growth, positive migration flows and a stronger commodity market are helping offset some of that impact.”

New listings also trended down this month causing the sales-to-new-listings ratio to rise to 85 per cent and inventories to trend down. Much of the inventory decline has been driven by product priced below $500,000.

While conditions are not a tight as what was seen earlier in the year, with only two months of supply, conditions remain tighter than historical levels. We are also seeing divergent trends in the market with conditions continuing to favour the seller in the lower-price ranges and shifting to more balanced conditions in the upper-price ranges.

As of October, prices have eased by four per cent relative to the highs reached in May. This is considered a relatively small adjustment when considering price movements in other large cities. It is also important to note that the October benchmark price is still nearly 10 per cent higher than levels reported last year.

Detached
Sales growth in the over $700,000 price range this month were not enough to offset the declines in the lower-price ranges, causing detached sales to ease by over 29 per cent compared to last year. Limited supply growth in the lower-price ranges continue to keep conditions exceptionally tight for lower-priced detached homes.

In October, inventory levels for detached homes were under 2,000 units, nearly 35 per cent lower than typical levels reported for the month. Moreover, over 42 per cent of the inventory falls in the upper-price ranges of the market. This is likely creating a situation where pricing trends will vary depending on price range.

Overall, detached prices did trend down relative to last month and peak levels in May but remain nearly 12 per cent higher than levels reported last October. The strongest year-over-year price gains have occurred in the North and South East districts.

Semi-Detached
While sales remain lower than last year’s levels in October, recent pullbacks have not offset gains from earlier in the year and year-to-date sales improved by nearly three per cent. A pullback in new listings relative to sales caused the sales-to-new-listings ratio to push above 80 per cent this month and inventories to ease, leaving the months of supply just over two months.

The benchmark price, while easing slightly compared to last month, remained over nine per cent higher than last year’s levels. Year-over-year price gains have varied from a low of nearly eight per cent in the City Centre to a high of 16 per cent in the North district.

Row
Row sales continue to rise relative to last year supporting a year-to-date gain of nearly 42 per cent. At the same time, new listings this month eased ensuring that the sales-to-new-listings ratio remain exceptionally tight at 106 per cent. Falling inventories and improving sales have ensured this market continues to favour the seller with less than two months of supply. This has also prevented the same adjustment in price.

As of October, the benchmark price was $361,200, less than one per cent lower than the peak achieved in June of this year. Overall, prices remained nearly 15 per cent higher than last year’s levels. The strongest price gains occurred in the South East, North East and North districts.

Apartment Condominium
Apartment sales continue to rise over levels reported last year contributing to the year-to-date increase of over 56 per cent. Improving sales were also met with gains in new listings, but as the growth in sales outpaced the new listings activity, inventory levels continue to trend down. As of October, the months of supply remained just below three months, the lowest level recorded in October since 2013.

In October, the benchmark price was $277,800, similar to last month and nearly 11 per cent higher than last year’s levels. Some of the strongest price gains have occurred in areas outside of the City Centre. Despite persistent price growth, overall prices remain nine per cent below previous highs set back in 2014.

Cochrane

With December sales of 1,199, this is the highest December total since 2007.

“Housing demand over the second half of 2020 was far stronger than anticipated and nearly offset the initial impact caused by the shutdowns in spring,” said CREB^® chief economist Ann-Marie Lurie.

“Even with the further restrictions imposed in December, it did not have the same negative impact on housing activity like we saw in the earlier part of the year.”

Attractive interest rates, along with prices that remain lower than several years ago, have likely supported some of the recovery in the second half of the year. However, it is important to note that annual sales activity declined by one per cent compared to last year and remains well below long-term averages.

New listings in December increased by 11 per cent. However, the number of sales exceeded the number of new listings in December, contributing to further declines in inventory.

Reductions in supply and improving demand in the second half of the year have contributed to some of the recent price improvements in the market. However, the recent gain in the benchmark price was not enough to offset earlier pullbacks, as the annual residential benchmark price in Calgary declined by one per cent over last year.

The pandemic has resulted in a significant shift in economic conditions, yet the housing market is entering 2021 in far more balanced conditions than we have seen in over five years. This will help provide some cushion for the market moving into 2021, but conditions will continue to vary depending on price range, location, and product type.

HOUSING MARKET FACTS

Detached

Stronger sales in the second half of the year were enough to offset earlier pullbacks, as detached sales totalled 9,950, just slightly higher than last year’s levels. Despite the modest gain, detached sales activity remains at the lower levels recorded since the stress test was introduced in 2018.

Supply adjustments is causing sellers’ market conditions for detached homes across all districts except the West and City Centre. This has helped support some price recovery in the market over the past several months.

Citywide prices remained relatively flat compared to last year, but there were notable annual gains in both the South and South East districts, which both recorded price gains of nearly two per cent. Despite some of the annual shifts seen, prices remain well below previous highs in all districts of the city.

Semi-Detached

Sales growth in the North East, North, West and South East districts were offset by declines in the City Centre, North West, South and East districts. This year’s sales total of 1,663 units is similar to levels recorded last year.

While sales did not improve across each district, there were reductions in supply across all districts, which is helping to reduce the months of supply.

These reductions are starting to impact prices, but it was not enough to offset earlier pullbacks. Citywide semi-detached prices eased by over one per cent in 2020, with the largest declines occurring in the City Centre, North West and West districts.

Row

Slower sales in the West district were not enough to offset the gains recorded in the rest of the city. Row sales totalled 2,145 in 2020, nearly two per cent higher than last year’s levels. Despite the gains, levels continue to remain below long-term averages for the city.

Rising sales were generally met with a reduction in supply. This is causing the months of supply to trend down, especially over the second half of the year.

The decline in the months of supply was enough to help support some stability in prices. However, the adjustment did not occur soon enough – annual prices eased by nearly two per cent compared to the previous year and remain nearly 14 per cent below previous highs.

Price adjustments did vary depending on location. The steepest decline occurred in the North East district, with a year-over-year decline of five per cent. The strongest gain occurred in the West district, which saw a two per cent increase.

Apartment Condominium

Sales this month marked the best December since 2014. However, it was not enough to offset earlier pullbacks, as apartment condominium sales eased by 10 per cent in 2020. This is the slowest year for apartment condo sales since 2001 and the only property type to record a significant annual decline in sales.

Unlike other property types, this segment remains oversupplied. Prices have trended down over the past two months due to excess supply. On an annual basis, the benchmark price declined by over two per cent this year and is over 16 per cent lower than the highs set in 2015.

REGIONAL MARKET FACTS

Airdrie

December sales reached a new record high for the month. Improving sales throughout the second half of the year contributed to the annual sales of 1,407, a year-over-year gain of 18 per cent.

New listings also rose in December, which is likely contributing to some of the monthly gains in sales. Overall, new listings have remained well below last year. Along with improving sales, this is causing inventories to decline.

Months of supply has remained below three months since June and prices have trended up. By December, the benchmark price had risen by nearly five per cent compared to last year.

On an annual basis, the gains in price were enough to offset the earlier pullbacks, creating stability in prices. However, this was not the case for all product types. Detached prices rose by nearly two per cent on an annual basis. Benchmark prices for row and apartment style product, however, eased by a seven and one per cent, respectively, compared to last year.

Cochrane

Record sales in December contributed to an annual gain of 16 per cent, making it the best year of sales in the past five years. New listings in 2020 also eased compared to last year. Rising sales and fewer new listings on the market caused inventories to ease to the lowest levels recorded since 2014.

With months of supply of only two months, prices continued to trend up. The December benchmark price was $419,900, a five per cent gain over last year. Prices have trended up over the past six months, but remain relatively stable compared to last year. This is due to easing prices for higher-density products offsetting gains in the detached sector.

Okotoks

Despite further declines in new listings, December sales improved. Year-to-date sales increased by nearly eight per cent. The lack of new listings, couple with stronger sales, caused inventories to drop to 63 homes in December, the lowest level for any month seen since 2006.

A combination of low inventory and high demand supported increasing prices in the second half of the year. As of December, the benchmark price was $434,700, nearly two per cent above last year’s levels. Despite the recent gains, 2020 benchmark prices remain over one per cent lower than last year’s levels.

However, this could be due to steeper price declines for semi-detached, row and apartment-style product.

With many people trading in their downtown commute for a home office due to the COVID-19 pandemic, proximity to the city centre has been less of a priority for house hunters this year.

In fact, a new emphasis on creating comfortable, productive workspaces within the home and the reduced importance of living anywhere near the office have increased buyer interest in areas just outside Calgary’s city limits – where prices are lower and space is plentiful.

While overall year-to-date home sales in Calgary are down compared to the same time in 2019, Airdrie, Cochrane and Okotoks have all recorded an uptick.

Resale activity grew by 12.5 per cent in Airdrie and 10 per cent in Cochrane, while Okotoks followed with a one per cent gain, according to data from CREB^®.

Sales in these areas have been paced by the single-family segment, says Ann-Marie Lurie, CREB^®’s chief economist.

In Airdrie, sales of detached homes, specifically, saw a 16 per cent increase during this time, while sales of detached homes in Cochrane grew by nine per cent.

Detached homes tend to have more square footage than other styles, a factor that has been top of mind for many recent homebuyers, says Tara Molina, a REALTOR^® with RE/MAX Real Estate (Central).

“I’ve had clients where … the motivation was, ‘Now we are working from home, so we need a space where we can actually work from home,’” she said. “What I am finding from my buyers and sellers is they are looking to have a home that has multiple functions to it.”

Due to the government-mandated shutdown earlier this year, as well as the ongoing efforts many are making to keep their distance from others, homeowners are spending more time in their homes than ever before.

“Now your home is not just where you live, but also operates as your gym, office, school, restaurant and entertainment space,” said Molina.

“I think people are reacquainting themselves with the two-storey or bigger homes because you need to supplement the lack of space that we are able to get in the public now, with shutdowns and this new lifestyle that we are having to adjust to.”

“I feel there will be a bit of a shift in demand sometime down the road back to inner-city communities, once office spaces are back up and running and there’s a working vaccine that’s easily attainable and things like that.” – Jackson Cornelius, Urban Analytics

The quest for more living space without a higher price tag has made communities on Calgary’s edge a natural draw.

The year-to-date median price for homes of all types within the City of Calgary is $407,082. In comparison, the median price is $365,000 in Airdrie, $388,000 in Cochrane and $380,000 in Okotoks.

Looking at detached homes, specifically, the year-to-date median price in the City of Calgary is 17 per cent higher than in Airdrie for homes in this segment.

“Both Airdrie and Cochrane are more affordable, relative to what you can get in the city,” said Lurie. “And all of a sudden, if the concern over the commute isn’t as big anymore, because people aren’t commuting to downtown Calgary every day or that work schedule has changed, that also can influence how far people are willing to live from the (city) centre.”

Multi-family sales in the new-home market reflect elevated interest outside the city, as well.

There were 29 sales of multi-family units in Cochrane in the third quarter of this year, up 480 per cent from the previous quarter, according to Urban Analytics, a market research and advisory firm.

Airdrie, however, saw less traction in this segment, with its 19 multi-family sales last quarter marking a 49 per cent quarter-over-quarter decline.

“I think the attractiveness of a destination location has definitely picked up in response to COVID-19,” said Jackson Cornelius, consulting and advisory lead for Urban Analytics in Alberta.

“You see it a lot in Kelowna, (B.C.), and that’s why prices are increasing there. People are taking the stance that if they are going to be working from home, downsizing their office space, that they won’t need to be so close to the city centre.”

However, this is a pivot in consumer preference that might be short-lived.

“I feel like the office space will make a comeback,” said Cornelius. “I feel there will be a bit of a shift in demand sometime down the road back to inner-city communities, once office spaces are back up and running and there’s a working vaccine that’s easily attainable and things like that.” The strongest increase in activity Urban Analytics has seen this year has been in suburban communities on Calgary’s northern and southern edges, such as Seton and Evanston, he adds.

This reflects a broader trend of increased demand for resale homes in Calgary’s newer suburbs, located far from the inner-city and downtown core.

Leading the city in overall resale activity between Jan. 1 and the end of October were the southeast master-planned communities of Cranston (329 sales), Auburn Bay (282 sales) and McKenzie Towne (262 sales), according to CREB^®.

Sales in Cranston represented a year-over-year increase of nine per cent, while the lake community of Auburn Bay posted a 17 per cent gain.

What Can Be Done About Mortgage Penalties?

Total residential sales in August were relatively stable compared to last year with year-over-year gains in the detached and row sectors.These gains offset declines in the apartment and semi-detached sectors. The 1,573 sales recorded in August are consistent with levels over the past five years. Year-to-date sales activity remains nearly 13 per cent below last year.

“Recent national reports have shown a bounceback to new record levels over the past several months. Calgary has seen improvements over the lows recorded during the lockdowns, but is far from record levels,” said CREB^® chief economist Ann-Marie Lurie. “We have started to see improvements in the job market compared to previous months, as some jobs start to return. The situation in Calgary has been slightly different, as the job losses were not isolated to sectors that are typically associated with rental demand. We have started to see improvements in the job market compared to previous months, as some jobs start to return.”

However, the impact of COVID-19 on the economy is not over.

“There have been more than 100,000 jobs lost since last year and Calgary’s unemployment rate sits at 15 per cent. This is well above the national average of 11 per cent,” said Lurie.

New listings are easing, which is helping to chip away at existing inventory compared to the higher levels recorded last year. However, the pace of year-over-year decline has eased, as inventory levels have trended up relative to levels recorded a few months ago.

The months of supply has also risen compared to the past few months and now sits at four months. This gain has slowed some of the monthly gains on prices. The residential benchmark price in August was $420,800, nearly one per cent lower than last year’s levels.