Hopefully everyone made it out just fine after our annual spring snowpocalypse; just feeling the thaw now.

Biggest headline this week: Calgary needs more housing!

The Canadian Mortgage and Housing Corporation (CMHC) says more housing is needed across the whole country, especially in Calgary (no surprise there). 

New home starts remained stable near all-time high levels (compared to last year), but Canadian cities are still experiencing a severe shortage. Demand for housing has grown significantly from an influx of immigration (and significant inter-provincial migration). 

In 2023, Calgary's housing starts increased by 13% – 19,579 units. However, notably detached homes experienced only a 2% growth, while townhomes and apartments experienced a 34% and 17% growth, respectively. 

However, just because housing starts remain at all-time highs, this doesn't mean completions are also there. The building industry has been plagued by rising costs, labour and material shortages have led to longer lead-times. This, ultimately leading various levels of government in Canada to announce housing initiatives (i.e., Calgary rezoning initiative).

To give a sense of the incredible population growth Alberta experienced in 2023, see below:

Source: Statistics Canada

Between January 1, 2023 and January 1, 2024 – Alberta added 202,324 residents (roughly the population of TWO RED DEERS, in 365 days). The only other record pace of annual population growth was seen in 1981!

Where are all these people coming from you may ask: 27% inter provincial migration, 73% international migrants.

Source: ATB Financial

The good news? Well, Alberta continues to lead the pack in attracting people who want to live and work here. There is a forecasted slowdown in population growth (so we can take a breather), but will still remain strong compared to the rest of Canada and other developed economies, driving further economic expansion and development in our province. 

However, growing pains ARE pains, and getting to a balanced real estate market will take TIME – maybe a long time. All comes down to supply and demand. 

It isn't Calgary if we don't get the obligatory snow dump here right before spring, about 8 inches as of writing...

Speaking of DUMPS, the Calgary new listings stats have also taken a deep dive this week (Spring Market 'heating up', rather, it seems as though it has already arrived).

Sold homes represent a staggering 113% of new listings in the last 7 days... with about 108% new pending deals to-boot. At this rate, many realtors really wonder, will there be anything to sell come April / May?

Notably, a few anecdotal observations on my own listings as well... 

1) Single family detached home (Highwood) – new infill, under contract within 24 hours of listing

2) Original 1945 bungalow (Tuxedo Park) –  prime land for infill building, under contract within 4 days of listing (24 showings, 6 offers); 108% of list price

3) Fourplex townhome (Parkdale) – gorgeous, well-maintained, under contract within 36 hours (20 showings, 3 offers); 105% of list price

... the list goes on...

Absent knowing the future, now is the best time to capitalize on gains made on your property if you're thinking about selling since there isn't much out there. Similar to listing your home in the dead of winter where listings are low, you're in the best negotiating position when there isn't much supply. 

On the buy side, it pays to be patient, but also to execute a purchase with precision. Although there are 'deals' to be had, you may be looking for a while if you're trying to fulfill the ideal buyer triangle (Features, Location, Price). My best advice: put your best foot forward when submitting an offer – no penny pinching, because you'll end up getting pinched in this market. 

The update is in for how the February real estate market performed here in Calgary; here's the snapshot (CREB):

In February, there was a notable uptick in new listings, BUT these were zapped up VERY quickly from existing and continued demand for housing across the city. As you have probably noticed in my last few updates - new listings equalled sales, with about 50% more of those in pending status; and even as of right now - there is no change...

Last 7 Days (All Residential) in Calgary:

• New Listings: 999

• Solds: 1,102

• Pending: 1,036

As noted by CREB's Chief Economist, "purchasers are acting quickly when new supply comes onto the market, preventing inventory growth in the market". The biggest challenge continues to be properties under $500,000, seeing a 31% shortage of inventory when compared to the same time last year. 

February Statistics:

Detached Homes

• New Listings: 1,195 (75% of these were listed for over $600K; +20% YoY)

• Sales: 954 (+20% YoY)

• Benchmark Price: $721,300 (+13% YoY)

Semi-Detached Homes

• New Listings: 223 (+16% YoY)

• Sales: 191 (+36% YoY)

• Benchmark Price: $639,100 (+13% YoY)

Townhomes

• New Listings: 457 (+27% YoY)

• Sales: 352 (+12% YoY)

• Benchmark Price: $436,500 (+13% YoY)

Apartments

• New Listings: 836 (+20% YoY)

• Sales: 638 (+30% YoY)

• Benchmark Price: $329,600 (+17% YoY)

If you're thinking about selling - it could not be a better time to take some money off the table. There won't be enough supply to feed the existing demand for quite some time.. Current days on market across all properties: 24 days (down 27% from last year, 33 days).

Some additional headlines from this week:

• Average asking rental prices reached $2,193 last month

• Calgary housing market more competitive due to increased migration, low inventory

• Downtown Calgary is on the rebound: CBRE Canada Market Outlook 2024

Happy Friday! Some key headlines this week – email a bit delayed since I was out of town, but key updates below.

1) The Canadian housing agency (CMHC) decided to SCRAP the First-Time Home Buyer Incentive, which was introduced in 2019 to help first-time homebuyers with lower mortgage payments. 

Deadline to apply: March 21, 2024 (more information)

Benefits: Allows up to 10% of purchase price help from the Government of Canada, who steps in with the down payment (equity), which upon sale (or after 25 years) will be subject to a fixed return paid back to the government.

However, this program was subject to eligibility requirements (household income and size of mortgage), which unfortunately only addresses to a very small population of Canadian residences – the juice wasn't worth the squeeze for the program. 

By now, the Canadian government is slowly starting to realize the issue is supply (and demand); and no Band-Aid fix can help when it comes to fundamental issues. 

2) In Calgary, housing starts are hitting a record level, despite the city's construction shortage – but demand continues to outpace supply.

• 61% increase in single family home starts compared to same period last year

• 48% increase in semi / rows / condos compared to same period last year

These results however, are trying to catch up with the last two years of record immigration to the city. On top of that, the supply takes 9-12 months for detached homes to be built, and quite a lot longer for larger multi-unit complexes. 

3) Bank of Canada holds key rates at 5% as expected by economists

• There remains key risks to higher inflation, such as attacks on Red Sea shipping routes – the worry here is against the clock, and inflation entrenchment if it remains stagnant for too long

• Central bank expects inflation to remain close to ~3% during 1H24 (recall impact of rate adjustments are felt 18–24 months). However, based on the commentary from Macklem, the BoC remains more hawkish than expected...