Calgary has been the subject of discussion lately, with the city council’s decision to go ahead with blanket rezoning. How much impact this will have on the market will remain to be seen.
In the meantime, however, the CMHC released its Spring Housing Market Outlook. While the rezoning changes could lead to greater housing diversification with denser housing in the future, once it takes effect on August 6th, the CMHC’s forecast for Calgary, as of May, predicted a period of growth and activity for the next couple of years, driven by various factors such as population expansion, stable economic conditions, and rising household incomes. A few of their predictions included:
Increase in Housing Starts
Housing starts are expected to rise due to strong demand fundamentals, including population growth and rising household income levels. Multi-unit homes are particularly in demand, with developers expected to initiate further construction to meet this need. The rezoning changes may have an impact, given the demand for multi-unit homes that the CMHC is noting.
Resale Market Activity Forecast
The resale market is expected to see an upward trend in activity, supported by low inventories that maintain seller’s market conditions. Modest price gains are forecasted due to these conditions.
Housing Starts Rises
Housing starts are projected to reach new highs in 2024, driven by strong demand and limited inventories. Builders are likely to continue breaking ground on multi-unit structures and lower-priced homes to meet demand.
Moderate Sales Growth and Price Increases
MLS® sales are expected to rise throughout the forecast period, moderated by a limited inventory of lower-priced dwelling types. Average MLS® prices are forecasted to trend upwards until 2026 due to low inventories maintaining seller’s market conditions.
Rental Market
Despite a growing rental universe, the vacancy rate for purpose-built rental apartments is expected to decrease further, leading to continued upward pressure on average rent. New rental supply isn’t projected to offset demand entirely.
Average rent for 2-bedroom apartment units is expected to continue increasing until 2026 due to persistently low vacancy rates and strong rental demand outpacing supply.
Market Outlook and Influences
The housing market in Alberta, particularly in Calgary, is expected to remain active and grow in both the resale and rental sectors, driven by strong demand fundamentals and limited inventory. However, macroeconomic factors, including inflation, interest rate changes, and fluctuations in oil and gas prices, could influence the market outlook in the coming years. Supply dynamics, including higher population and income growth could strengthen demand.
This fairly positive forecast seems consistent with an insight from the CREA that while prices are generally “sliding sideways” across Canada, Calgary, along with Edmonton and Saskatoon, were the exceptions to this, with prices trending upwards since the beginning of last year.
