Calgary's Booming Real Estate: Navigating the 2024 Market

In a startling turn of events, Calgary’s population surged by over 200,000 in the past year, catapulting the city’s real estate market into unprecedented territory. This remarkable growth has set the stage for a dynamic and challenging Calgary housing market in 2024.

As the President and Principal Broker of Clover Mortgage, I’ve witnessed firsthand the seismic shifts in Calgary’s real estate market. The rapid population influx has created a perfect storm of high demand, rising prices, and tight inventory. Understanding these trends is crucial for anyone looking to navigate this complex market successfully.

Current Market Conditions

The Seller's Market Reigns Supreme

Calgary’s real estate market in 2024 is firmly in the seller’s court. With a sales-to-new listings ratio hovering around 72%, we’re seeing intense competition among buyers for limited available properties, reflecting a significant shift in home sales patterns.

“The current market dynamics strongly favour sellers, with many properties receiving multiple offers within days of listing,” notes our senior mortgage broker, Linda Mac .

Price Trends That Demand Attention

The average price for various property types has seen significant year-over-year increases:

These figures underscore the robust growth in Calgary’s real estate values, with projections suggesting an 8% climb in average house prices by the end of 2024, potentially reaching $717,000.

Inventory Levels: A Tight Squeeze

The current inventory situation is creating significant challenges for buyers. With just 1.4 months of sales inventory for detached homes, Calgary home prices are experiencing a severe supply shortage.

Explore further

What is an Assignment Sale? Mortgage Renewal Condo vs. House: Investment Opportunities Does It Hurt Your Credit to Compare Multiple Mortgage Quotes?

Population Growth and Migration

Calgary’s remarkable population surge has been a defining factor in shaping the city’s real estate landscape. The influx of over 200,000 new residents in the past year represents one of the most significant demographic shifts in the city’s recent history.

This population growth is also reflective of broader trends in the Canadian housing market, where changes in the Bank of Canada's interest rates have driven fluctuations in housing activity, impacting affordability and market trends across different regions of Canada.

Breaking Down the Numbers

The population growth in Calgary can be attributed to two main sources:

1. International Migration
2. Interprovincial Migration

While exact breakdowns are not provided in the given facts, historical trends and current economic conditions suggest that both these sources have contributed significantly to Calgary's population boom.

"We're seeing a diverse mix of newcomers, from international professionals to Canadians relocating from other provinces, all drawn by Calgary's economic opportunities and quality of life, " notes our mortgage specialist, Victoria Ishai .

International Migration

Calgary has long been an attractive destination for international migrants, drawn by:

• Strong job market, particularly in the energy and tech sectors
• Relatively affordable housing compared to other major Canadian cities
• High quality of life and access to natural amenities

Interprovincial Migration

The interprovincial migration trend has been particularly noteworthy. Factors driving this include:

• Economic opportunities in Alberta's recovering energy sector
• Lower cost of living compared to cities like Vancouver and Toronto
• Attractive real estate prices for those selling homes in more expensive markets

Impact on Housing Demand

The population surge has had a profound impact on the housing market and housing demand in Calgary:

1. Increased Competition : More buyers in the market have led to bidding wars and quick sales.
2. Diverse Housing Needs : Different demographics of migrants (families, young professionals, retirees) are creating demand across various property types.
3. Rental Market Pressure : Not all newcomers are ready to buy, putting pressure on the rental market and potentially driving more investment in rental properties.
4. Suburban Growth : Some areas outside the city core are seeing increased interest as buyers seek more space and affordability.

Future Projections for 2024

Looking ahead to the rest of 2024, experts anticipate:

• Continued population growth, albeit at a slightly reduced rate compared to the previous year
• Sustained demand for housing, maintaining upward pressure on prices
• Potential for new development and zoning changes to address the growing population's needs

It's important to note that while growth is expected to continue, the rate may moderate slightly. Factors that could influence this include:

• Changes in national immigration policies
• Economic conditions in other provinces (affecting interprovincial migration)
• Calgary's ability to create jobs and housing to accommodate the influx

Long-term Implications

The sustained population growth in Calgary has far-reaching implications for the real estate market:

1. Housing Supply Challenge : Developers and city planners are under pressure to increase housing supply to meet growing demand.
2. Infrastructure Needs : The city may need to accelerate infrastructure development to support the growing population.
3. Changing Neighbourhoods : Some areas may see demographic shifts and increased density as new residents settle in.
4. Economic Opportunities : The population growth could attract more businesses and investment, further fueling the real estate market.

Economic Factors Influencing Real Estate

The Mortgage Rates Conundrum

Rising mortgage rates are impacting affordability, yet demand remains strong due to the economic opportunities in the region. As a mortgage broker, I’ve seen firsthand how these rates are affecting buyers’ purchasing power. Mortgage brokers play a crucial role in navigating these changes, ensuring compliance and consumer protection while acting as intermediaries between borrowers and lenders.

“ Despite higher rates, we’re seeing continued interest from buyers drawn to Calgary’s robust job market and quality of life ,” observes our mortgage specialist, Rushi Parikh .

Economic Opportunities Driving Demand

Alberta's strong economic environment continues to attract new residents seeking job opportunities, sustaining the demand for housing despite affordability challenges.

Zoning Changes and Development Initiatives

While specific details about new zoning bylaws in Calgary aren’t provided in the given facts, we can discuss the general trends and implications based on common urban development strategies.

These changes can significantly impact market prices, as they often lead to fluctuations due to seasonal factors and development initiatives.

Overview of New Zoning Bylaws

Many growing cities like Calgary are implementing zoning changes to address housing shortages. These often include:

• Allowing higher density development in previously single-family zones
• Reducing minimum lot sizes to allow for more units per area
• Relaxing height restrictions in certain areas to encourage vertical development

" We're seeing a shift towards more flexible zoning that allows for a mix of housing types within neighborhoods, " observes our senior mortgage advisor, Steven Crowe .

Impact on Multifamily Housing Development

City strategies often focus on promoting multifamily housing development to efficiently use available land and increase housing supply. This could involve:

• Incentives for developers to build apartment complexes and townhouses
• Streamlined approval processes for multifamily projects
• Zoning changes to allow for more mixed-use developments

Anticipated Changes in the Housing Landscape

These initiatives are likely to result in:

1. Increased density in certain neighborhoods
2. More diverse housing options within single areas
3. Potential for more affordable housing units
4. Gradual transformation of some single-family areas into mixed-density neighborhoods

While these changes aim to address the housing shortage, their full impact may not be immediately felt in the 2024 market due to the time required for development and construction.

Challenges Faced by Buyers and Sellers

Buyer Frustrations in a Competitive Market

Buyers in Calgary's 2024 market are facing significant challenges:

1. Limited Inventory : With only 1.4 months of sales inventory for detached homes, buyers have few options to choose from.
2. Rapid Price Increases : The 12% year-over-year increase in benchmark prices for both detached and semi-detached homes is outpacing many buyers' ability to save for down payments.
3. Bidding Wars : The seller's market conditions, with a sales-to-new listings ratio of 72%, often result in multiple offers and bidding wars.
4. Quick Decision-Making : The fast-paced market requires buyers to make quick decisions, often without the usual due diligence time.

Inventory Shortages and Their Effects

The tight inventory situation is having several effects:

• Increased Competition : Fewer available homes mean more buyers competing for each listing.
• Higher Prices : Limited supply and high demand are driving up prices across all property types.
• Faster Sales Process : Homes are selling quickly, often within days of listing.
• Stress on Buyers : The pressure to act quickly and potentially overpay is causing significant stress for many buyers.

Seller Advantages

Sellers in Calgary's 2024 market are in a strong position:

1. Multiple Offers : Many sellers are receiving multiple offers, allowing them to choose the most favorable terms.
2. Price Appreciation : With benchmark prices up 12% year-over-year, sellers are seeing significant returns on their investments.
3. Quick Sales : The low inventory means that well-priced homes are selling rapidly, reducing carrying costs for sellers.
4. Favorable Terms : Sellers often can negotiate favorable terms, such as shorter closing periods or as-is sales.

Future Outlook for Calgary Housing Market

Predictions for Price Increases and Market Stability

The Calgary Real Estate Board anticipates a 6.5% increase across all property types in 2024, with specific increases for condos and row houses expected to be even higher.

The average house price in Calgary is projected to climb by 8% in 2024, reaching around $717,000 by year-end.

These projections suggest continued strong price growth, albeit at a slightly slower pace than the 12% year-over-year increases seen for detached and semi-detached homes. The average prices reflect broader market trends and can be influenced by changes in consumer purchasing behaviors and the impact of luxury home sales.

Potential Shifts in Migration Patterns

While specific future migration projections aren't provided, we can infer:

• Population growth is expected to continue, though potentially at a slightly reduced rate compared to the previous year's surge of over 200,000 new residents.
• International and interprovincial migration are likely to remain significant factors in Calgary's population growth.
• Economic opportunities in Alberta will continue to attract new residents, sustaining housing demand.

Long-term Expectations for Inventory and Housing Supply

Looking ahead:

1. Tight Inventory : The current low inventory levels (1.4 months for detached homes) are likely to persist in the short term.
2. Gradual Supply Increase : As new developments come online and zoning changes take effect, there may be a gradual increase in housing supply.
3. Continued Demand Pressure : The ongoing population growth is likely to maintain pressure on housing supply for the foreseeable future.

“While we expect some easing of the supply crunch as new developments come to market, demand is likely to remain strong, keeping the market competitive,” says our mortgage expert, Tyler Salmon . Condo owners should also consider personal condo insurance to protect their individual units and belongings.

Conclusion

Calgary’s real estate market in 2024 presents a complex landscape of opportunities and challenges. For buyers, the key lies in being well-prepared, financially ready, and quick to act. Sellers, while in a advantageous position, must navigate carefully to maximize their returns while planning their next move.

As we look ahead, the interplay of population growth, economic factors, and housing supply will continue to shape Calgary’s real estate future. Whether you’re looking to buy your first home , invest in property, or refinance your current mortgage, understanding these trends is crucial.

At Clover Mortgage, we’re committed to helping our clients navigate these waters with expert guidance and tailored mortgage solutions. Whether you’re considering a home purchase , looking into refinancing options , or exploring investment properties , our team is here to help you make informed decisions in this dynamic market.

Remember, in a market as hot as Calgary’s, having a trusted mortgage broker by your side can make all the difference. We’re here to help you unlock the door to your real estate goals, no matter how challenging the market may seem. The Canadian Real Estate Association (CREA) provides authoritative data and insights, supporting real estate professionals and consumers across Canada.