Calgary House Market Report
Sales activity has behaved as expected through the start of 2023 and slowed by 43 per cent over last year’s all-time record-high performance in the first quarter . The steeper decline in the first quarter was expected, given the surge in sales last year, as purchasers were eager to enter the market ahead of expected rate gains . While no further rate gains have occurred so far this year, the higher lending rates and limited supply choice are contributing to some of the pullbacks in sales . Nevertheless, despite the decline, sales activity has remained well above pre-pandemic levels thanks to recent gains in migration coupled with a stronger employment market . The most notable challenge in the market has been related to supply levels . New listings were expected to ease as higher lending rates would make it more difficult for the move-up buyer . However, the pace of decline in new listings has exceeded expectations . New listings in the first quarter declined by 40 per cent, preventing any significant shift in the supply levels given the relatively strong sales . Inventory levels in the city averaged 2,814 units in the first quarter, 21 per cent lower than last year’s levels and over 42 per cent below long-term trends for the first quarter . With a sales-to-new-listings ratio of 71 per cent and a months of supply of under two months in the first quarter, conditions continue to favour the seller . Exceptionally tight market conditions early last year drove significant price gains throughout the 2022 spring market, peaking at $544,733 in the second quarter . While supply demand balances remained tight throughout 2022, prices did trend down over the third and fourth quarters, somewhat adjusting for the rapid rise earlier in the year . Further tightening in the supply-demand balance in the first quarter was enough to stop the downward price trend as the quarterly benchmark price rose over two per cent in the fourth quarter to $531,200 but remained below the Q2 high . Some of the fluctuations in price were expected this year, given what happened last year . However, price growth to date has been stronger than expected . Given the limited supply currently on the market, we could expect to see some stronger price growth through spring, potentially supporting a modest annual gain in 2023 .