All nine of Canada’s major real estate markets are projected to see an increase in home prices next year, but one city is expected to see noticeably higher levels of price appreciation.
In its annual Market Survey Forecast, Royal LePage predicts that the aggregate price of a Calgary home in the fourth quarter of 2024 is set to increase 8.0% year over year to $711,612. This is the highest of all forecast regions and greater than the national aggregate forecast of 5.5%. Throughout the second half of 2023, while prices have been declining in other cities, the Calgary real estate market has bucked the trend continuing on an upward price trajectory.
During the same period, the median price of a single-family detached property in Calgary is expected to rise 6.0% to $803,692, while the median price of a condominium is forecast to increase 9.5% to $286,562.
Nationally, home prices are anticipated to increase marginally in the first half of 2024 before rising more sharply mid-way through the year when the Bank of Canada is expected to make a modest cut to the overnight lending rate, a decision that will encourage sidelined buyers to re-enter the market as their buying capacity grows. This trend will be amplified in Calgary, where home supply has not kept pace with growing demand from local and out-of-province buyers who continue to seek out the Alberta city for its relative affordability and desirable lifestyle.
“Although activity has slowed in Calgary, home prices have not dipped like they have in other cities across Canada, due to a sustained shortage of supply,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “If rates start to come down in the second half of 2024 – as they are predicted to do – it will motivate buyers to jump into the market as their borrowing power improves. Many homeowners will see their mortgages come up for renewal next year, and will be forced to take a higher interest rate. This may push some more inventory onto the market, as overleveraged borrowers downsize in an effort to get some relief from higher monthly payments.”
Lyall expects Calgary home prices to rise over the coming year. Though the city has seen an overall slowdown in the number of interprovincial buyers relocating to the area compared to the past few years, Calgary continues to entice buyers. In the first six months of 2023, Calgary was the second-most top-searched city on royallepage.ca, and made up 1.9% of total royallepage.ca searches between January 1st and June 30th, 2023, more than double the searches reported during the same period in 2019.
“We expect that home prices will rise over the next year, and will outperform other major cities as Calgary’s relative affordability continues to attract buyers to the city. A shortage of supply remains a challenge, which will keep prices on an upward trajectory for the foreseeable future as buyers compete for the few homes available,” said Lyall.
For additional forecast information on Canada’s major real estate markets, read more here.