Calgary home prices expected to keep climbing, even as hot market eases from record levels
CBC
Calgary's hot housing market is expected to ease from last year's record levels, but prices are forecast to continue rising as the market remains at stronger-than-historical levels, says a new industry outlook.
The Calgary Real Estate Board's annual forecast says rising lending rates and home prices are likely to slow demand growth, but the board anticipates citywide prices to increase by over four per cent in 2022.
A four-per-cent hike in CREB's benchmark price of a detached home in Calgary would represent a $21,179 bump to $549,662 this year, up from $528,483 last year.
"Overall, [sales] levels are expected to remain much higher than long-term trends, reflecting a strong demand environment," according to the report released Tuesday.
"As we move through the economic recovery, and job prospects improve, demand for resale housing will remain relatively strong."
CREB believes sales will still be strong because many were able to save more money during the COVID-19 pandemic. The board is forecasting the city will record 25,598 sales this year, down from 27,686 last year but up from 16,149 in 2020.
"The challenge in 2022 is expected to be related to supply," it said.
"Starts activity did improve last year, which should help with overall housing supply in 2022, but resale supply may struggle to remain at adequate levels to support balanced conditions throughout the earlier part of the year."
The board said that as the supply-demand balance gradually improves, upward price pressure in the housing market should ease.
But CREB chief economist Ann-Marie Lurie cautioned that while conditions in the housing market are expected to remain strong, "there is a significant amount of uncertainty that could impact housing." "If supply levels remain low relative to demand, we could see stronger-than-expected price growth," she said in a release.
"On the other hand, if rates rise much faster and higher than expected, it could cause a more significant pullback in sales."
Many people will be watching to see what the Bank of Canada decides to do about interest rates on Wednesday.
Expectations are growing that central banks will soon have to raise their interest rates to keep a lid on inflation, which has run up to the highest level seen in decades.
"We know rate hikes are coming — the question is, is it tomorrow or is it in March?" said Charles St-Arnaud, chief economist at Alberta Central, the central banking facility for the province's credit unions.