Why Do Housing Prices Fluctuate?
There are many factors that impact housing prices. Some factors among these are interest rates, the economy, and population growth. Factors such as consumer confidence, inflation, migration, unemployment and interest rates contribute to the real estate housing market as well. Another major reason contributing to increasing prices in the Canadian housing market recently has been the pandemic, where the country has seen unprecedented housing prices for more than a year. In March and April 2020, sales volumes and price growth slowed down as buyers reacted to the uncertainty caused by the pandemic and reduced their purchases. However, two years since then, there have been record-low interest rates and homebuyers started looking for more space after being in a small house or condo while working from home.
Housing Predictions for Calgary 2023
According to a housing report by Desjardins, Edmonton, Calgary, and Winnipeg will see the largest improvement in housing affordability in 2023. Regions that saw the greatest decline in affordability like Ontario and British Columbia during the pandemic will be slow to get back to the pre-pandemic levels of affordability.
The average home price in Calgary is still comparatively affordable and is expected to continue. A recent Housing Market Outlook report from CMHC reveals that Alberta will likely see strong home sales and be stimulated by energy sector investments and higher energy and commodities prices. Also, the growth in housing prices is predicted to be below the national average, therefore, reflecting more balanced supply conditions than in other regions. For example, the benchmark house price in Calgary during the peak in February was just over $487,000 compared to more than $718,000 in Ottawa, whereas the average price of a detached home was $1,797,203 in the Greater Toronto Area (GTA). Going forward, Calgary’s strong economic growth will encourage strong support for the housing market in this region. In addition, with the growing demand for workers and high quality of life, Calgary is expected to continue to be a net recipient of interprovincial migrants. Calgary is predicted to see the smallest decline in its housing market when compared to other provinces in Canada. This is due to the fact that Calgary never achieved the big bubble that took place in Toronto and Vancouver, and has remained relatively stable and will continue to do so.
Desjardins released a real estate outlook report recently and revealed that provinces with large oil and gas economic footprints like Alberta and Saskatchewan will see slower declines in housing prices than Ontario, Quebec, and British Columbia. Alberta will see less of a decrease because of stronger energy prices. The Calgary housing market cooldown is not sharp like in Vancouver and Toronto, so Calgary realtors and business leaders are positive for the upcoming year. Migration to Western Canada continues to create housing demand, as prospective home buyers from Ontario and B.C., are priced out of their respective local markets. As a result, Calgary has become a relative hotspot for many first-time homebuyers and young couples.
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