Want to buy a house in Calgary? Discover why the city's real estate market is booming despite high interest rates

CEO Khai Intela
Are you considering buying a house in Calgary? You're not alone. Despite rising interest rates and a slowdown in many housing markets across Canada, Calgary's real estate market continues to thrive. In this article, we...

Are you considering buying a house in Calgary? You're not alone. Despite rising interest rates and a slowdown in many housing markets across Canada, Calgary's real estate market continues to thrive. In this article, we will explore the factors behind the city's housing boom and why it remains an attractive option for homebuyers.

The Calgary Advantage

The Calgary Real Estate Board recently reported that the average home price in Calgary has reached $539,461, representing a nearly 10% increase compared to last year. So, what sets Calgary apart from other cities? Economists, such as Ann-Marie Lurie, the chief economist for the Calgary Real Estate Board, attribute the city's strength to its comparative pricing. Even as interest rates rise, the cost difference between Calgary and more expensive cities like Toronto and Vancouver remains significant.

The Teranet-National Bank House Price Index supports this claim, showing that although prices in Toronto and Vancouver have decreased from their peak in 2022, they are still considerably higher than Calgary's. This affordability gap is particularly appealing to buyers from markets like Toronto, where detached homes can cost over a million dollars. In Calgary, these buyers find similar homes at significantly lower prices, making them less sensitive to higher interest rates.

The "Gold Rush" Effect

For those struggling to afford homes in more expensive markets, Calgary's current housing market feels like a "gold rush." Realtor Nadine Faule, who specializes in helping clients relocate to Calgary, describes the situation as a frenzy. She explains that there is a severe shortage of properties available, resulting in intense competition among buyers.

Alejandro Decker, who recently visited an open house in Calgary, shares his frustration with the lack of options. He expected the process to be easier but found himself overwhelmed by limited choices. This sentiment is echoed not only by prospective buyers but also by real estate agents and Calgarians in general. The demand for homes in Calgary is high, and the current market heavily favors sellers.

Population Surge and Limited Supply

Calgary's attractiveness extends beyond its affordability. The city is experiencing a significant influx of newcomers, both from other provinces in Canada and internationally. According to Stéfane Marion, chief economist with the National Bank of Canada, this population surge contributes to the high demand for housing. However, the supply of new housing, or "housing starts," is not keeping up with the growing population. As a result, the limited supply and increased demand continue to drive prices higher.

Although Alberta attracts more people than any other province in Canada, the real estate market numbers for the summer of 2023 indicate that Calgary's price increases outpace those of other Alberta cities. For instance, Edmonton has experienced a higher inventory of available properties in recent months, which has eased pressure on supply and created a more balanced real estate market.

Affordable for Now, but Challenges Ahead

While Calgary remains relatively affordable compared to other Canadian regions, economists warn of potential affordability issues in the future. With expected population growth and a low housing market inventory, the lack of affordability seen in markets like Toronto and Vancouver could gradually transfer to the Calgary region. Rishi Sondhi, an economist with TD Bank, acknowledges the affordability concerns but emphasizes that prices in Alberta were falling even before the pandemic. He suggests that the current market is catching up rather than surpassing historical affordability levels.

In conclusion, Calgary's real estate market continues to flourish despite high interest rates. The city's comparative pricing, population surge, and limited housing supply contribute to its appeal for homebuyers. While affordability concerns loom, Calgary offers an attractive option for those seeking a home in a thriving city.

Calgary Housing Market Calgary properties like the one at Nadine Faule's open house are "like the gold rush" for people struggling to afford homes in more expensive markets.

Alejandro Decker Alejandro Decker has been looking to purchase a home in Calgary for more than a month — but finds a lack of supply to be a problem.

Stéfane Marion Stéfane Marion, chief economist with the National Bank of Canada, warns that there aren't enough houses being built in Calgary to match the number of people migrating to the city.

Rishi Sondhi Rishi Sondhi, an economist with TD Bank, points out that housing prices in Alberta were falling prior to the pandemic.

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