Calgary’s real estate scene in 2023 was a rollercoaster of trends and transformations, a market abuzz with dynamic shifts and soaring aspirations. From resilient sales to a tug-of-war between supply and demand, the year unveiled a landscape pulsating with change and opportunity. Prepare for a 2024 real estate journey in Calgary—expect strong demand, potential price hikes, and a market striving for balance amidst changing tides.
A Year of Movement and Change
Calgary’s real estate market in 2023 experienced significant activity, with a total of 27,416 sales recorded throughout the year. Although slightly lower than the previous year’s peak, this figure exceeded long-term trends, showcasing a continued interest in the housing market despite various challenges. Notably, there was a noticeable shift in preferences, with buyers showing increased interest in more affordable apartment-style homes. This shift was notably driven by strong migration trends, compensating for a slight dampening effect caused by higher lending rates.
Sales vs. Listings
The real estate market experienced a balancing act between sales and available listings. While sales remained resilient, the supply side struggled to keep up, resulting in an unexpected price surge. The increased demand, mainly due to migration, clashed with limited supply levels, ultimately driving higher prices. This dynamic played a significant role in steering the market’s trajectory throughout the year.
The Unyielding Supply Challenge
One of the persistent challenges in Calgary’s real estate market throughout 2023 was the continuous shortfall in supply. Inventory levels consistently lagged behind long-term averages, averaging a 44% decline over a 10-year period. Particularly evident was the scarcity of available homes priced below $1,000,000, contributing to a tight market where the months of supply remained consistently below two months throughout the year.
The Numbers Tell the Story
Despite a slight slowdown in the average annual benchmark price growth from 12% in 2022 to around 6% in 2023, Calgary witnessed remarkable price surges. These increases were significant, especially when benchmarked against other markets nationwide. This upward price trajectory directly resulted from the persistent demand-supply imbalance prevalent throughout the year.
Detailed Insights into Home Types
Let’s take a closer look at different types of homes:
- Detached Homes: Detached home sales faced a considerable decline of almost 20% in 2023. Limited options in the lower price brackets pushed buyers to explore alternative housing styles, influencing the overall sales activity. Despite this decline in sales volume, prices continued their upward trajectory, although at a slower pace, averaging an almost 8% increase, predominantly witnessed in the more budget-friendly districts. The benchmark price for detached homes surged to $697,400 by the end of 2023.
- Semi-Detached Homes: Semi-detached homes experienced a 10% drop in sales, primarily due to constrained choices below the $500,000 price point. The limited supply posed challenges, resulting in relatively lower sales volumes. However, the market sustained a steady pricing trend, witnessing a 7% benchmark price increase, reaching $627,100.
- Row Properties: The row property segment faced an 11% decline in sales despite an uptick in transactions for homes priced above $400,000. This demand surge in higher price ranges created a more balanced upper market while favouring sellers. Consequently, annual benchmark prices surged by over 13% across various districts, reaching an impressive $425,100.
- Apartment Condominiums: The apartment-style property segment showcased record-high sales in 2023, reaching 7,884 units, initially supported by improved inventory levels. However, as demand outpaced supply, conditions tightened, giving sellers the upper hand and leading to notable price growth. Prices skyrocketed, surpassing 2014 to $321,400 by December, marking a substantial 13% annual surge in benchmark prices.
In summary, Calgary’s real estate market in 2023 experienced strong sales but grappled with limited supply, leading to substantial price increases across diverse property types. Benchmark prices soared, mirroring the high demand and restricted supply dynamics prevailing throughout the year.
Looking ahead to 2024, Calgary’s real estate market seems ready for ongoing demand. If interest rates drop and migration stays strong, more buyers might enter the market. But, just like in 2023, finding available homes might still be challenging. Prices could keep going up, making it competitive for buyers. The year ahead might be about balancing what people want and what’s available, creating a changing and sometimes uncertain market.
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