The message "Alberta is Calling" has been heard loud and clear.  A net increase of 41,124 people coming to the province in the last quarter of 2022 is putting pressure on the inventory of housing available.  The spring season is when the highest number of listings typically come to the market.  However, as May begins, there is just over a one month supply of listings .  In April, the benchmark price for a detached house in Calgary hit a new high of $661, 900. 

In the spring 2023 Housing Market Outlook, CMHC notes "continued strength in the energy sector will support demand for housing in Calgary". However, it is expected that the city's housing sales volumes will moderate from 2022, but "the demand for housing in 2024 and 2025 will be sustained from "interprovincial and international migration".  Finally "affordability in the rental market will decline as vacancies continue to decrease and rents continue to rise."  If you are considering a property sale or purchase, contact me for a conversation about your next move.  

As we enter the traditionally busy spring real estate market, conditions are back to favouring sellers.  The severe lack of listings has many Calgary home buyers being faced with competing offers, especially for detached properties.  The lowest level since 2006,  the 3233 listings available for sale in March leaves less than a two month supply.    

As high demand collides with low supply, there is upward pressure on prices as the busy spring season unfolds.   Based on 2432 sales, the benchmark price edged up 1% to $541,800 in March.  However, stronger prices do not seem to be attracting the attention expected from potential sellers as "existing homeowners may be reluctant to list as they struggle to find an acceptable housing alternative in this market.  At the same time, higher lending rates can also reduce the incentives for existing homeowners to list their home."  

March MLS Statistics
 

As we transition into spring, it is also the time of year when tax season shifts into high gear. If higher mortgage rates and inflation were not enough for Canadians to wrestle with, there is a new federal tax applicable to residential property.

Effective January 1st, 2023, the ‘Underused Housing Tax’ (UHT) requires property owners with vacant or property which is considered to be ‘underused’ to pay 1% on the value of residential property owned on December 31 each year. A return, even if you qualify for an exemption, must be filed by April 30*. Failing to file a return may result in a minimum penalty of $5,000 for individuals and $10,000 for a corporation, for each property.

Thus, checking with your accountant if the UHT applies to you and filing a return should be a priority on your spring real estate ‘to do’ list.   

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Link to CRA with UHT details

*Filing date extended to October 31, 2023

When 2022 began, home buyers could obtain a 5 year fixed mortgage in the range of 2.0% to 3.0%.  As the year comes to a close, mortgage rates have more than doubled.  With the Bank of Canada continuing to sharply increase the benchmark rate with another 50 basis points on December 7, property owners will face higher mortgage payments for the foreseeable future.  Not surprisingly, huge the volume of housing sales in the first quarter of 2022, has diminished as the fourth quarter closes out.  Nonetheless, the number of properties sold in Calgary for 2022 has set new records. 

In November, there was a 22% drop in sales, but this is 12% above long term averages and 10% above the record high mark set in 2021.  The benchmark price for a detached home is $619,700, falling just under 5% from the peak in May.  The benchmark price of apartment condos is up 10% to $277,000 over last year, remaining off the high point set in 2014.   A decline in sales for November was also met with a drop in listing supply.  At 3109 listings, this is the lowest inventory  since November 2005.   

Unlike Toronto and Vancouver, the future for housing sales in Calgary for 2023 is more optimistic.  Low listing inventory, strong migration, low unemployment and strong economic development,  Calgary has forward momentum going into January. 

READ MORE HOUSING STATISICS

"The creation of well-paid jobs coupled with our relatively affordable housing market compared to cities like Toronto and Vancouver is helping attract talent to our city.  While our city is not immune to the challenges caused by inflation and higher lending rates, the positive momentum experienced over the past year is expected to support conditions that are far better then they were prior to the pandemic."

It has been a series of extreme highs and lows for Calgarians since 2016.  However, the consensus emerging is that the city will fair relatively well compared to other major Canadian cities as inflation and interest rates surge upwards.  One of our significant advantages is affordable housing.