5 Things That Will Affect Calgary Real Estate in the Next 10 Years

Like any housing market in Canada, Calgary real estate has navigated extreme changes in recent years due to the pandemic, economy and supply chain issues. While home prices peaked a couple of years ago, interest rates remain high, making buying a home quite expensive. However, Calgary’s liveability, relative affordability compared to other parts of Canada, and diverse economy make it a desirable place to live. If you want to get into the Calgary housing market, here are a few things to consider in the next 10 years.

Inflation and Affordability in Calgary

Inflation is at the forefront of everyone’s minds. It is getting increasingly difficult to afford even the necessities, never mind putting anything extra into savings to buy a house. Additionally, interest rates have skyrocketed, making a house even more out of reach. As a result, the amount of money people can save and borrow to finance their homes is taking a significant hit, which has slowed price growth and made it much harder for first-time homebuyers to qualify for a mortgage.

Calgary real estate statistics reveal that while the city remains more affordable than markets like Toronto or Vancouver, the inflation-driven cost increases are affecting buyers across all price ranges. Continuing high interest rates are making it harder for borrowers to pass the federal government’s mortgage stress test. The stress test requires borrowers to prove they can afford to make payments that are the higher of: a) two per cent above the contract rate, or b) the government benchmark of 5.25 per cent. This, in turn, could lead to changes in the types of homes built in Calgary, with some people turning to group ownership or smaller homes.

Supply and Demand in Calgary Real Estate

When it comes down to the basics, the prices of homes in Calgary and whether they rise or fall essentially comes down to how many are on the market at any given time and how many people want them. The recent rise in prices can be attributed to the high demand during the pandemic and several years of less-than-ideal housing stocks.

Unlike some other Canadian cities, Calgary has the advantage of adding more housing relatively easily because new construction is not restricted by physical or municipal barriers. So, more houses will be built to accommodate the high demand, but it will take a bit of time.

The Calgary area real estate development pipeline shows promising growth in new construction starts, though many projects remain months or years from completion. Developers are increasingly focusing on multi-family dwellings and transit-oriented communities to maximize land use and address housing shortages.

Building Costs and Supply Chain Issues in the Calgary Real Estate Market

As inflation has impacted Calgary residents trying to buy food and gas, rising costs have also affected Calgary and the real estate market. Supply chain issues during the pandemic, combined with high shipping and material costs, have resulted in homes being built for far more money than they used to be.

In addition, homebuyers have been more focused on energy efficiency and environmentally friendly home materials. Although sustainable homes are good to strive for, they come at a price. Homebuyers either must come up with more money to buy a house the same size or use the same amount to buy a smaller home.

H2 The Rise of Tech in Calgary

Calgary has been working for years to attract startups to the city, and its efforts have begun to pay off. They rose six points to number 28 on CBRE’s annual scoring of tech talent, indicating that they are reining in tech companies and workers. As a result, Calgary-based tech companies netted a record $322.2 million in funding.

Technology will also play a role in Calgary’s real estate scene in the coming years. The rise of e-commerce and new concepts like e-scooters have changed how people live in the city, making it more accessible for homebuyers in all areas of Calgary. Since residents are no longer required to live near their workplaces and other frequently visited areas, Calgary is likely to see a shift to previously less popular neighbourhoods, as they are further removed from the city’s central hubs. There could be a more distributed development pattern for Calgary in the coming decade, with innovation hubs potentially emerging across the city rather than concentrated solely downtown.

How Working from Home Has Impacted Calgary Real Estate

Even before the pandemic, Calgary was beginning to face a problem with downtown office vacancies due to a shift in how work is conducted. During the pandemic, it shifted even more, and now many workers opt to keep a work-from-home job rather than find a job in an office. Working from home makes people more open to moving to the suburbs of Calgary or even into rural Alberta. Despite downtown Calgary showing signs of revitalization through strategic office-to-residential conversions and increased transit ridership, the hybrid work model also remains prevalent across many industries.

The flip side is that working from home requires more space in homes for offices, which could increase demand for larger homes in established communities. While some people are taking advantage of remote work to move to rural communities, most people are opting to remain in urban centres like Calgary to retain a sense of community or look to surrounding cities like Airdrie, Cochrane, and Okotoks for cheaper real estate.

Calgary area real estate companies continue to respond to this mixed work environment by creating flexible living spaces that accommodate both remote work needs and reasonable commutes to downtown offices. This has created interesting movement patterns on the Calgary real estate map, with some previously overlooked neighbourhoods gaining popularity due to their balance of space, affordability and accessibility to the gradually revitalizing downtown core.

How is the Calgary Real Estate Market Right Now?

So, how is the real estate market in Calgary at the moment? Real estate in Calgary is experiencing modest but steady growth. Unlike the more volatile markets in Toronto and Vancouver, Calgary offers more affordable housing, with average prices hovering around $616,000. However, Calgary luxury real estate listings continue to attract interest from both domestic and international buyers.

The current Calgary real estate statistics show increased buyer activity compared to previous years, driven largely by interprovincial migration and the city’s strong job market. Neighbourhoods throughout the Calgary area real estate map are experiencing varied growth patterns, with communities near transit lines and employment centres commanding premium prices.

Investors are particularly drawn to the stability of the Calgary real estate market, which has managed to avoid the dramatic swings experienced in other major Canadian cities. With inventory levels remaining relatively tight and demand staying consistent, Calgary’s housing sector presents a balanced environment for both buyers and sellers as we move toward the long-term trends that will shape the next decade.

As Calgary’s real estate market continues to evolve in the next ten years, residents can continue to adapt to changes in how they work and navigate the city. Building new forms of housing can help meet the needs of a diverse population and maintain affordability while adapting to changes in the city’s housing sector.