Calgary’s real estate market continues to astound observers as it achieves unprecedented heights. Despite the challenges presented by rising interest rates, the market has maintained its vigour. In August, it marked a historic seventh consecutive monthly gain. What is the primary catalyst behind this remarkable trend? The apartment condominium sector. This blog delves into the key factors driving this surge and explores its implications for buyers, sellers, and the broader Calgary real estate landscape.
Robust Demand and Record Sales Figures
August 2023 will be remembered as a monumental month for the Calgary real estate market, with a remarkable 2,729 home sales reported. This represents a stunning 22 percent year-over-year gain, solidifying its position as one of the strongest August sales levels ever recorded. The factors contributing to this include increased migration to the province and the region’s affordability, which continue to drive housing demand, even in the face of higher lending rates.
Affordable Apartments Propel Market Momentum
One of the standout contributors to the market’s record-setting pace is the apartment condominium sector. With their relative affordability, apartments have emerged as a favoured choice among prospective buyers. Consequently, while year-to-date sales have experienced a 15 percent decline compared to last year, the apartment market has displayed remarkable resilience, posting a 10 percent year-to-date gain in sales activity.
Inventory Levels Remain Tight
Despite the traditional seasonal dip in both sales and new listings in August, inventory levels have remained exceptionally low, echoing levels last witnessed in 2006. With a sales-to-new-listings ratio of 87 percent and only 1.1 months of supply, conditions heavily favour sellers, providing them a substantial advantage in negotiations.
Upward Momentum on Home Prices
The persistent supply-demand imbalance continues to exert upward pressure on home prices in Calgary. In August 2023, the unadjusted total residential benchmark price reached an all-time high of $570,700, marking the eighth consecutive monthly gain. This impressive figure translates to a price increase of over four percent compared to the previous peak in May 2022.
Diverse Growth in Different Property Types
Examining the market by property types reveals distinct trends:
1. Detached Homes: The detached home segment experienced a monthly gain of almost one percent in August 2023, with the unadjusted benchmark price reaching $696,700. The city’s most affordable North East and East districts observed the most robust year-over-year and monthly price growth.
2. Semi-Detached Homes: The semi-detached market saw substantial monthly gains, particularly in the North East and East districts, where prices rose by over two percent compared to July 2023. The City Centre district experienced price stability. The unadjusted benchmark price for semi-detached homes reached $623,200 in August 2023.
3. Row Properties: Row properties enjoyed strong demand, with the benchmark price reaching $413,200, reflecting a monthly gain of over one percent and a remarkable 16 percent increase compared to prices reported in the previous August. Price gains were observed across all districts, with the most significant growth in the East district.
4. Apartment Condominiums: This property type emerged as the only one to report a year-to-date gain in sales activity, up 22 percent compared to last year. Despite recent increases in new listings, the apartment condominium market remains tight, with a sales-to-new-listings ratio of 98 percent and only one month of supply. The unadjusted benchmark price for apartments reached $309,100, indicating a robust month-over-month increase of over one percent and a significant 13 percent growth compared to the same period last year.
Calgary’s real estate market reached new heights in August 2023, boasting record sales figures and soaring home prices. Despite the challenges posed by rising interest rates, demand for housing remains robust, driven by factors such as migration to the province and the allure of the relatively affordable apartment condominium sector. In this competitive landscape, buyers should be prepared for stiff competition as the market continues to favour sellers due to tight inventory levels.
As we look ahead, industry experts and analysts will closely watch how the market evolves. Factors like migration patterns, lending rates, and housing supply will continue to shape Calgary’s real estate landscape. For now, homeowners in Calgary can celebrate the rising value of their properties, while prospective buyers must adapt their strategies to secure their dream homes in a dynamic market. As the market continues to evolve, staying informed and flexible will be vital in navigating Calgary’s ever-changing real estate landscape.
Click here to explore the detailed monthly stats package for the City of Calgary.
