Coming off a record-setting year, Calgary’s housing market kicked off 2022 with strong sales figures and renewed optimism for an economic rebound.
According to a recent RBC Thought Leadership article, Calgary home resales soared 66.4 per cent year-over-year and 23 per cent month-over-month in January. Transaction totals could have been even higher without supply constraints limiting sales.
The city is poised to benefit from a recent surge in oil prices. After dipping below $40 USD a barrel at the pandemic’s onset in early 2020, the price of West Texas Intermediate rose above $9 USD last week, reaching its highest point since 2014.
“The stronger prospects for the provincial economy — led by a rebounding energy sector — has significantly boosted confidence in the housing market over the past year,” said RBC senior economist Robert Hogue.
The Calgary Real Estate Board (CREB) noted that drum-tight market conditions caused Calgary’s benchmark price across all property types to reach $472,300, up nearly two per cent month-over-month and representing an increase of 12 per cent from this time last year.
While 2,476 new listings hit the market last month, the recent jump in sales decreased housing inventory to 2,620 units, marking the city’s lowest supply level since 2006.
“We did see more listings last month, but it did little to change the market balance or take any pressure off prices,” said CREB chief economist Ann-Marie Lurie. “This was expected, as these conditions should persist for several more months.”
The majority of demand is focused on detached homes, which reached a benchmark price of $559,800 last month, up two per cent compared to December and 13.8 per cent year-over-year.
While new listings for detached homes increased in January (1,295 units), a total of 1,148 sales during the month reduced inventory levels to a new record low of 895 units, resulting in less than one month of available supply.
“Expected gains in lending rates are contributing to persistently strong demand in the housing market, as purchasers are eager to get ahead of any increases,” said Lurie.
Row houses also saw prices rise and supply levels drop last month, with the benchmark price ($305,600) up two per cent from December and nine per cent year-over-year. Sales figures for the month (305 units) were more than double January’s typical average, leaving 422 units of inventory.
The CREB reports that the benchmark price of a Calgary condominium now sits at $251,200 after sales soared to 357 units, up 94 per cent year-over-year to mark the highest January total since 2007.
The increased sales figures resulted from 551 new listings being added to the market last month, and with more than 1,000 units of available inventory, condos have more current supply than any other property type.
“Despite challenges with COVID-19, we are starting to see a turnaround in our job and migration numbers, and while interest rates are expected to rise, they remain relatively low,” Lurie explained. “All these factors are expected to support strong housing demand into 2022.”
