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Most Canadian resale real estate markets are expected to soften this fall until the end of the year — except Calgary, a new report is forecasting.
Re/Max Canada released its new 2023 Fall Housing Market Outlook Report showing that sales and average prices will largely decline year over year in many parts of the country, including Vancouver, Ottawa and Kelowna.
“We’re certainly going to be off pace from last year,” says Chris Alexander, president of Re/Max Canada in Toronto.
Yet the report also predicts that some cities, including Calgary, will see their average prices climb — though not necessarily due to rising sales.
In fact, sales are expected to fall across Canada by year’s end compared with 2022, he adds.
Yet with inventories at historical lows, including Calgary, some cities will still see gains in their average price.
In turn, the report forecasts the average price in Calgary at the end of 2023 will rise 4.5 per cent year over year reaching about $564,000. That’s despite it predicting sales could drop 20 per cent.
Alexander notes demand remains strong in Calgary — as in other large centres — but choice is limited by two factors hampering sales. One is supply where in Calgary, for example, inventory was down 25 per cent year to date, ending July 31, compared with last year.
The other factor is higher interest rates — though that could change, too, he adds.
“If we get another pause next month from the Bank of Canada, we could see renewed activity,”
Indeed, a poll commissioned for the report highlights the impact of rates on buyer and seller decisions, especially younger buyers. It found that 55 per cent of generation Zs (individuals aged 30 or less) and nearly half of millennials (respondents in their 30s and early 40s) have changed their housing plans due to higher borrowing costs.
Higher rates aside, demand for housing remains strong, Alexander says, especially in Alberta, which has experienced record high migration in the last year.
Alexander notes that demand could grow in Calgary and elsewhere if, as previously mentioned, interest rates stay steady or even fall slightly in the coming months.
Among those municipalities seeing growth would be Greater Toronto Area where already low inventory and persistently strong demand are forecast to push the average price up 2.5 per cent by year’s end, reaching about $1.17 million. That’s despite sales being expected to remain flat, according to the report.
Those ongoing tight conditions in the GTA and surrounding areas are, in fact, a key reason Calgary is experiencing continued strong demand with buyers from those jurisdictions moving here to take advantage of the city’s lower home prices, says Darryl Terrio, broker/owner of Re/Max Complete Realty.
“The single-family segment has been tight for awhile, but now it’s even townhouses and condos.”
Terrio adds that local buyers make up the majority of demand, but out-of-province buyers have been more prominent in the last year — in some cases as investors — buying homes across all segments.
Regardless of the buyers’ origins, the going challenge is supply as many would-be sellers are reluctant to list, Terrio says.
“Sure, they can sell and get a great price, but what are they going to buy?”