The Canadian real estate market has been navigating a period of significant shifts in 2024, driven by economic factors, government policies, and evolving buyer preferences. From coast to coast, the market landscape is dynamic, with some regions experiencing cooling trends while others remain robust. This blog explores the current state of the Canadian real estate market, with a particular focus on Calgary, one of the country’s most vibrant cities.
National Overview: A Cooling Market with Regional Variances
After years of red-hot growth, the Canadian real estate market has begun to show signs of cooling in 2024. According to the Canadian Real Estate Association (CREA), national home sales fell by 9.5% compared to the previous year, while the average home price decreased by 4.8%, driven mainly by higher interest rates. Introduced by the Bank of Canada to combat inflation, these rates have tempered buyer enthusiasm, particularly in markets like Toronto and Vancouver, which had seen unprecedented price surges over the past decade. The once-frenzied bidding wars have become less common, and price growth has moderated.
However, the national picture is far from uniform. While cities like Vancouver saw price drops of up to 8%, regions such as the Prairies experienced stable conditions. Alberta and Saskatchewan have seen only a 1-2% price decrease, maintaining relative stability compared to the larger declines in Ontario and British Columbia.
Calgary: A Market of Opportunity and Caution
Calgary, the economic hub of Alberta, presents a unique case within the broader Canadian real estate market. Unlike Toronto or Vancouver, Calgary’s housing market has historically been more affordable, making it an attractive destination for both first-time buyers and investors. In 2024, Calgary’s market remains resilient, although challenges persist.
1. Economic Factors: A Mixed Bag
Calgary’s economy, closely tied to the energy sector, has experienced volatility, but recent diversification efforts have provided a more stable base. The technology sector alone saw a 7% growth in employment, contributing positively to housing demand. However, fluctuations in oil prices continue to impact market confidence, necessitating a cautious approach.
2. Population Growth and Housing Demand
Calgary continues to see population growth, driven by interprovincial migration and immigration. In 2024, Calgary’s population increased by 2.4%, outpacing the national average of 1.5%. Many Canadians from other provinces are drawn to Calgary’s relatively lower cost of living, strong job market, and high quality of life. This influx has supported steady demand for housing, particularly in suburban areas and new developments.
The city’s vibrant culture and community events also play a significant role in attracting newcomers. This year, the Calgary Stampede, one of the city’s most iconic events, set a new record for single-day attendance, with over 220,000 visitors in one day. This milestone highlights Calgary's growing appeal as not just an economic hub but also a lively city with a strong sense of community, further boosting its real estate market.
3. Price Trends: A Balanced Market
As of mid-2024, Calgary’s real estate market is characterized by balanced conditions. According to the Calgary Real Estate Board (CREB), the average home price increased by 3.1% year-over-year, with detached homes and townhouses being particularly popular. While the market is not as heated as during the peak pandemic years, it remains competitive, with well-priced properties attracting multiple offers.
4. Challenges: Interest Rates and Affordability
Like the rest of Canada, Calgary’s market feels the impact of higher interest rates. The Bank of Canada’s policy rate now sits at 5%, up from 4.25% last year, making mortgages more expensive and challenging for first-time buyers. Despite this, Calgary’s affordability compared to cities like Toronto and Vancouver continues to attract buyers seeking value, with average home prices still about 40% lower than in those cities.
5. The Rental Market: A Strong Performer
Calgary’s rental market has been a bright spot in 2024. With rising interest rates pushing some potential buyers into the rental market, demand for rental properties has increased. The vacancy rate dropped to 2.1%, down from 3.5% in 2023, while rental prices rose by an average of 6%. This trend benefits investors who have diversified into rental properties, as returns remain strong.
Conclusion: A Market of Opportunity
For those looking to buy or invest, Calgary offers a market of opportunity. While the broader Canadian real estate market is experiencing a cooling phase, Calgary’s relative affordability, economic growth, and steady demand make it an attractive option. However, buyers and investors must remain cautious, particularly given the challenges posed by rising interest rates and the need for careful financial planning.
As Calgary continues to evolve, it’s clear that this city will remain a key player in Canada’s real estate landscape, offering both stability and growth potential in a shifting national market. If you’re considering buying, selling, or investing in Calgary, staying informed and seeking professional advice is essential to navigate today’s complexities.