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Our Quick Take
All signs are pointing to an upward trending housing market. With inflation continuing on a downward trend we can expect rates to come down soon. Home inventory continues to be low so an increased level of competition may be on the horizon.
The Calgary Real Estate Market is Looking UP!
The Calgary real estate market is seeing positive changes!
We are all aware of the Bank of Canada’s aggressive campaign last year to nip inflation in the bud by increasing interest rates. And it hurt for many. It brought house-selling activity to an abrupt slowdown, although that slowdown in Alberta was much less than was experienced in both the Greater Toronto and Vancouver areas. I believe that is directly tied to how overheated those markets were compared to Alberta. We simply didn’t have the same bubble to pop!
Inflation is trending downward!
On April 12th the Bank of Canada made its third interest rate announcement of the year. Inflation is trending downward since last fall, but it has really improved since December. Currently, the Bank is predicting we will be around 3% by summer and in 2024 we should hit the target 2% inflation rate.
If inflation doesn’t continue to drop there is a risk that the bank could increase rates again, but as long as things continue on the current trajectory, we will likely start to see the Bank of Canada drop rates as early as the end of this year.
Most economists predict a 1.5% drop in the bank rate between now and the end of 2024.
Fixed rates have already started moving downward from the peak they hit in November. We are now seeing fixed rates around 4.5% instead of as high as 5.5% just a few months ago.
Encourage Signs in Calgary!
With regard to housing in Calgary, we are seeing some encouraging signs. Unsurprisingly home prices did drop from their peak nearly a year ago as the Bank of Canada steadily raised rates. But specifically, it is the average price that dropped. Looking at each category of housing, each of those are actually up again already! This is because apartment condos and townhouses now make up a greater percentage of all homes purchased!
To get a feel for what things are like in Calgary Real Estate I spoke with Bryon Howard of the Howard Real Estate team with EXP Realty.
In short, we are seeing less activity than a year ago, but with a small amount of inventory, and buyers coming out of the woodwork, we are seeing homes sell quickly, and prices are trending upwards.
Calgary remains relatively affordable
Calgary remains one of the most affordable major housing markets in the world, and it is attracting a lot of people from out of province who want a more affordable lifestyle.
If you have been sitting on the sidelines waiting for things to bottom out, we might just be in the sweet spot where interest rates are a little bit higher, but you could take a short 3-year term, and buy a home before the prices really start to climb again.
If you are interested to see what your options are, or how this might affect you specifically, my team and I are standing by and looking forward to talking with you!