This morning, the Bank of Canada trimmed interest rates for a fifth consecutive time as the country's economy grows at a slower pace than expected. 

The 50bps cut (or 0.50%) was largely expected by analysts and economist, as Canada's GDP grew by only 1% in Q3 2024, and Q4 2024 is looking much weaker than projected.

Not only that, but Canada's unemployment rate also rose to 6.8% in November, making it tough for those who are looking for work, especially those younger and newcomers. 

BMO chief economist expects that to increase further, averaging 7.0% in Q1 2025, before receding slightly. Further complications to the Canadian economy are clouded by uncertain US tariffs that were threatened, which would also further weaken the Canadian dollar (currently 0.71 CADUSD at time of writing). Further Details.

The silver-lining in this is that cost for housing as improved, as well as the larger inflation picture for goods and services across the country... What this could do for Alberta, and Calgary could potentially mean a more balanced market into the new year (i.e., further demand for housing driven by lowered interest rates but offset by the impact of unemployment, and lower population growth). That said, there still remains consistent demand in Calgary for homes priced under $600K, and more a buyers' market for anything above $700K, for now.

The next BoC rate announcement will be on January 29, 2025. 

Additional inflation data will be released over the next few weeks for an update on November figures.

Announced yesterday, Canada's inflation rate INCREASED more than expected in October (+2.0% month-over-month), as compared to September (+1.6%). 

This rate of price growth (inflation) is a KEY measurement tool for the Bank of Canada to decide on it's interest rate policy, and has been the main focus since Canadians have been feeling the pinch in inflation, from groceries, gasoline, and ultimately real estate prices. 

The announcement, although disappointing to the BoC, followings a string of reports of better-than-expected performance to it's interest rate policies.

Although a mixed bag of estimates, the general consensus is for the BoC to trim interest rates FURTHER on December 11, 2024 (next BoC rate meeting announcement). The question becomes - by HOW MUCH will the BoC trim interest rates? For now, banks and economists are expecting a 25 to 50 bps reduction (or 0.25% to 0.50% cut). This would bring the BoC policy rate down to either 4.0% or 3.75% in December (isn't that a relief? We haven't seen rates with a 3-handle for some time now!). 

Below is the relationship between interest rates and inflation in summary:

With the change in interest rates, here's a rough relationship between detached home prices in Calgary and policy rates:

Only time will tell how the rate cuts will impact our real estate market here in Calgary, but industry expects a ramp-up of demand following this last rate cut of the year, and setting us up for high demand in the Spring. 

Reach out if you have any questions, or are curious on how you're best positioned on this evolving market on both the buying and selling side.

Good morning folks, another monthly update from CREB for the month of October – Needless to say, the same problem continues to exist, with lower-priced homes in HIGH demand, while the market for higher-priced homes is now becoming more balanced. That said, October sales activity increased over last month, and remains elevated at ~24% higher than the long-term trend. 

Sales activity would be stronger, if we had seen more inventory for product priced under $600K. 

Overall, inventory levels have improved with growing number of listings over the last 6 months (4,966 units available in October), a marked improvement from last year's near-record low of 3,205 units last October. Despite this, the composition of inventory is the key change, with nearly 50% of the inventory now priced ABOVE $600,000.

Recall, a balanced market see's month of supply range between 3-4 months, and we're still sitting in quite a tight market with 2.3 months of inventory. 

More below from CREB:

Details by property type, below:

If you have any questions at all, please reach out to our team to help guide you, wherever you are in the process!

As colder fall weather and winter months quickly approach, below are some fall and winter maintenance tips to share! Whether you're renting or you own property, these are good to know to make sure you and your family are safe and secure for the colder months ahead, and your investment in your home is protected. Also a great time to update your home insurance policies to ensure adequate coverage for your home and belongings.

Please reach out if you're looking for inspector / contractor to help with any of the work below! 

For those of you who are keen on keeping track of HVAC service items, I've put together a handy tracker to tape in your mechanical room as a reminder of when it was last serviced. Feel free to use and download HERE. I know we always forget to change our furnace filters, so here's a little extra step to make sure you're taking care of those items making them last longer.

The Government of Alberta has officially announced registration fee increases outlined in it's Spring budget, to take effect October 20, 2024 which will have material impact to real estate transactions. 

What are registration fees?

a. They are fees imposed by the Alberta Land Titles Office for registering documents, including transfers of land, mortgages, builders' liens and caveats. When these documents are registered, it ensures there is a public record of who owns the land and any interests of encumbrances or liens.

Key Fee Changes to Know (this impacts the buying side):

1. Transfers of Land

2. Mortgage Registrations and Land-Charging Caveats

Here is a simple comparison of the OLD FEE vs. the NEW FEE, as an example:

This is a material jump in cost for purchasing and needs to be understood when making your purchase, so it's not a surprise (part of closing costs). 

Land Transfer fees have jumped 150%, while Mortgage Registration fees have jumped 200%. 

Despite these increases, Alberta's land title and registration fees still rank the LOWEST in Canada. In comparison to BC and ON, not only are Alberta fees LOWER, we also don't have a land transfer tax that could represent a range of 1–3% of total purchase price, based on pricing tier. 

If you have any questions or concerns, best to get a consultation with a real estate lawyer, or can call me to discuss!

Wow, October already! Hoping everyone is enjoying the nice fall weather we've had – quite a few things to look forward to into the season and into the holidays to finish the year. 

CREB released it's month market update yesterday, and the underlying comment here is that the market is shifting. 

In September, we experienced total sales of 2,003 – 17% BELOW last year's record high, but remains 16% ABOVE the long term trend. 

Listings are increasing, but not in a way you'd expect. The growth in listing activity has been in higher-priced homes, with limited choices for lower-priced homes, likely preventing stronger sales in our market.

While demand remains high across all price ranges, we don't expect the lower-priced supply issues to subside anytime soon. Total new listings rose to 3,687 units, the highest September total since 2008 – which did support some inventory growth (total September inventory: 5,064 units), but remains under the 6,000 units we typically see in September. 

More details below (FULL RELEASE HERE):

Detached

• Benchmark Price: $757,100 (-0% MoM, +9% YoY)

• Total Sales: 942 (-26% MoM, -17% YoY)

• Total New Listings:  1,792 (+4% MoM, +18% YoY)

• Sales-to-New Listings: 53%

• Months of Supply: 2.5 Months (+67% YoY)

• Days On Market: 27 Days (+7% YoY)

Semi-Detached

• Benchmark Price: $678,400 (-0% MoM +10% YoY)

• Total Sales: 182 (+6% MoM, -4% YoY)

• Total New Listings: 299 (+0% MoM, +8% YoY)

• Sales-to-New Listings: 100%

• Months of Supply: 2.0 Months (+34% YoY)

• Days On Market: 25 Days (-4% YoY)

Townhomes

• Benchmark Price: $459,200 (-0% MoM, +10% YoY)

• Total Sales: 377 (-2% MoM, -5% YoY)

• Total New Listings: 603 (+57% MoM, +27% YoY)

• Sales-to-New Listings: 63%

• Months of Supply: 2.0 Months (+102% YoY)

• Days On Market: 25 Days (+19% YoY)

Apartments

• Benchmark Price: $345,000 (-0% MoM, +14% YoY)

• Total Sales: 502 (-17% MoM, -29% YoY)

• Total New Listings: 993 (-0% MoM, +7% YoY)

• Sales-to-New Listings: 51%

• Months of Supply: 3.2 Months (+121% YoY)

• Days On Market: 33 Days (+16% YoY)

If you have any questions at all, please reach out to our team to help guide you, wherever you are in the process!

Last week, the federal government unveiled it's latest mortgage changes, which are effective December 15, 2024 (details here). 

These changes are intended to make housing more affordable in Canada, and providing first-time home buyers wider options into home ownership and increasing the price limit, for insured mortgages. 

First, there are two types of residential mortgages in Canada (broadly): 1) Insured and 2) Non-Insured - specifically speaking of insurance coverage to protect the lender (mortgage default insurance).

Insured Mortgages: for loans that are MORE than 80% of the home price, these mortgages are also known as high loan-to-value mortgages

Non-Insured Mortgages: for loans that are LESS than 80% of the home price, these are also known as 'conventional' mortgages

This mortgage default insurance protects the LENDER by providing more confidence by decreasing their risk, and can lend you more with a smaller down payment (this has nothing to do with your home insurance).

2 KEY MORTGAGE CHANGES:

1) Cap of insured mortgages increasing from $1.0 million to $1.5 million (significant in markets such as Vancouver / Toronto)

   • Down payment structure for these high-priced homes are a little different, and remain the same:

   • 5% for the portion of purchase price up to $500,000

   • 10% for the portion of purchase price between $500,000 to $1.5 million

   • This means that buyers will be able to purchase a $1.5 million dollar home with just a $125,000 down payment (a material reduction from the current $300,000 requirement for uninsured borrowers)

2) Insured mortgages (less than 20% down payment) can now amortize over 30 years (instead of the previous maximum 25 years)

   • This helps home buyers with lower monthly payments

   • Applies ONLY to new builds and first-time homebuyers

A few requirements to be eligible for this:

   1. Borrower has never purchase a home before

   2. Borrower has not owned or occupied a principal residence in the last 4 years

   3. Borrower has recently experienced a breakdown in marriage or common-law relationship, in line with the CRA's approach to the Home Buyer's Plan

Ultimate Takeaway: The federal government acknowledges the housing 'crisis' however these initiatives will further BOOST demand allowing buyers to afford more. These changes will further bolster housing demand, opening up new markets for buyers who may be just under the cusp of affordability under the current rules. Extended amortizations could increase purchasing power by ~10%, similar to a 0.90% interest rate cut, according to BMO Economists.

In addition, falling interest rates into the winter will likely see additional demand for housing across the country, from those who have been sitting on the sidelines waiting for this moment. 

More from the Government of Canada.

Ann Marie CREB Economist came to provide us an update on the status of the Calgary market this Monday, a few key takeaways to share (apologies for the lengthy email but a lot of gold nuggets in here):

1. Interest rates ease as Canadian economy slows

   • Current inflation rate of 2.5% (target of 2% per BoC)

   • Canadian GDP growth of 0.5% in Q2 2024

   • Interest rates expected to reach 4.0% by the end of this year (from 4.25% today)

2. Calgary’s rental market remains very strong

   • Rental construction in Calgary has been robust, completing nearly 7,000 apartment units YTD (2024), HOWEVER, approximately 73% of that represents exclusively for rentals and only 1,894 units are for ownership (of which ~38% is estimated to be rented out)

   • Currently there are 14,856 apartment units under construction, of which 55% represents exclusively for rentals

   • Rents in Calgary have increased by 4% since last July

3. Population growth remains KEY to housing activity

   • We’ve seen approximately 377,725 individuals move to Alberta on a NET basis since 2021, with the majority of folks moving in 2023

   • We’ve seen a slowdown in migration this year largely due to policy changes on foreigners, BUT the people that have moved here represents significant demand on our housing supply, and we’re catching up

   • Still, Alberta has seen a net migration figure of ~45,000 just from January – March this year, with more than 50% of those moving right into our city

4. Prices are expected to remain strong – fundamental metrics do not point to boom / bust cycle

   • The key for prices to drop is if supply dramatically increases, and people leaving Calgary

   • We aren’t expecting negative migration anytime soon, and prices for homes have remained very strong (likely a new floor)

   • Looking at the graph below, we can see the relationship between migration and the average detached home prices in Calgary

5. Seeing a shift in market, but inventory remains tight – current trend represents seasonal slowdown

   • We’re seeing shifts in the market with more listings coming to market (this is healthy)

   • An increase of ~37% of total inventory compared to August last year, but is still 25% BELOW the 10 year average

   • At 2.1 months of supply (balanced market is around the 3-4 months of supply)

6. Where are these listings coming from?

   • Listings growth is coming from HIGHER priced homes

   • No apartments in Calgary under $200K

   • No detached homes in Calgary under $400K

   • Below is a split of where the listings are coming from, with 78% of detached homes listed above $600K

7. Prices are showing signs of stability

   • This is a healthy sign for a sustainable market and likely sets a new floor for prices in Calgary

   • We’re seeing months of supply come back up (to 2 months), away from an extreme seller’s market (<2 months)

   • Sales are limited by lack of lower priced supply

8. People continue to move here due to 2 main reasons

   • Relative affordability

      o Calgary CMA has the highest household income relative to Edmonton, Vancouver and Toronto

   • Economic growth

      o 2024F GDP for Alberta expected to reach 1.7% (as compared to national growth of 0.5%)

9. 2024 Migration Forecast

If you have any questions or want to see the entire presentation – please reach out!

Well here we are folks, September came up quick this year – hoping everyone had a great long weekend and a short week!

CREB released it's monthly market update, with a notable shift in market conditions moving from an extreme sellers-market to a little bit more buyer-friendly with total housing supply nearing two months (levels not seen since the end of 2022). Up to this point, we've had total supply under 2 months, and even under 1 month at certain times. 

Increase in new-home construction and new listings supported the improved supply, HOWEVER our supply remains LOW - particularly with lower priced properties (under $600K), and will take time for supply levels to return to balance. 

Benchmark prices across property types remained relatively flat month-over-month, and still represent some material appreciation from last year (9–16% in price growth!).

More below from CREB:

Detached

• Benchmark Price: $762,600 (-0% MoM, +9% YoY)

• Total Sales: 1,278 (-20% MoM, -14% YoY)

• Total New Listings: 1,721 (-7% MoM, +5% YoY)

• Sales-to-New Listings: 64%

• Months of Supply: 2.0 Months (+40% YoY)

• Days On Market: 26 Days (+8% YoY)

Semi-Detached

• Benchmark Price: $681,200 (-0% MoM +10% YoY)

• Total Sales: 172 (-12% MoM, -12% YoY)

• Total New Listings: 297 (+13% MoM, +26% YoY)

• Sales-to-New Listings: 58%

• Months of Supply: 2.0 Months (+57% YoY)

• Days On Market: 25 Days (+10% YoY)

Townhomes

• Benchmark Price: $461,700 (-0% MoM, +12% YoY)

• Total Sales: 384 (-9% MoM, -15% YoY)

• Total New Listings: 384 (+11% MoM, -15% YoY)

• Sales-to-New Listings: 60%

• Months of Supply: 1.7 Months (-34% YoY)

• Days On Market: 25 Days (+26% YoY)

Apartments

• Benchmark Price: $346,500 (-0% MoM, +16% YoY)

• Total Sales: 604 (-24% MoM, -31% YoY)

• Total New Listings: 1,001 (-0% MoM, +12% YoY)

• Sales-to-New Listings: 60%

• Months of Supply: 2.4 Months (+120% YoY)

• Days On Market: 32 Days (+7% YoY)

If you have any questions at all, please reach out to our team to help guide you, wherever you are in the process!