It’s been the most consistent real estate narrative since mid-2020: high demand and low supply is creating a red-hot seller’s market. This potent combination has played out across the country, leading to tightening markets from coast to coast. But what about the Alberta real estate market?
Since the start of the pandemic last year, many people have been spending more time at home, precariously balancing working, schooling, exercising and recreation time with everyone under the same roof. This was the catalyst for a cultural shift that sent shockwaves through the Canadian real estate industry. Homeowners were clamouring for more living space, indoors and outdoors, and we’re willing to relocate far from any urban hubs.
With property prices in most markets in Ontario and British Columbia skyrocketing to unaffordable levels, many young first-time homebuyers have been setting sights upon traditionally less expensive markets such as Alberta. Not only do local Alberta real estate markets meet the affordability criteria, but they are also more sparsely populated and allow homeowners to seize the living space that they’re after. As demand creeps upward however, this is creating supply issues for smaller Alberta markets, and the Medicine Hat housing market is no exception.
Low Supply in Medicine Hat, Alberta Real Estate Market is Taking its Toll
Known as the Oasis of the Prairies, Medicine Hat, Alberta, has always been a desirable place to live for those who are looking to escape the expenses and hustle and bustle that accompanies big city living. The city is known for having the lowest combined tax rate in Canada, the lowest utility rates in Alberta, and a climate that is desirable year-round.
Closing out a strong first half of the year, the total number of residential units sold in Medicine Hat at the end of June was 156. This is both a year-over-year gain and a year-to-date gain by 24.8 per cent and 92.1 per cent, respectively. High unit sales indicates that the market is strengthening into buyers’ territory as prices have also been rising due to supply not reaching demand. The month saw 173 units hit the market, which is a slight year-over-year decrease of 6.5 per cent and not enough to counteract the high unit sales.
Average prices for the Alberta city were slightly down on a year-over-year basis by 2.1% coming in at $297,519 – a number mostly driven by the large increase in pricing for both row houses and apartments.
July saw the sales activity in Medicine Hat slightly decrease. However, the minor dip was not nearly enough to curb the high activity for earlier in the year. The 104 unit sales during over the month was a slight dip compared to the previous year, however it contributed to the astonishing year-to-date sales numbers. Come the end of July, year-to-date sales totalled 882 units, beating out the last 14 years of unit sales for that period – further contributing to the pull towards an imbalanced market.
While sales were on the rise, other real estate metrics were down in the month of July. New listings hitting the market during July were down 3.3 per cent compared to July 2020, coming in at 146 new residential properties listed. The lack of new listings contributed greatly to the falling inventory levels. Inventory on hand at the month’s end was 31.2 per cent lower than July 2020, with only 302 units. While the current inventory in the Medicine Hat real estate market is low relative to traditional levels at this time of year, should demand remain consistent, there are three months of supply on hand, which is a far better situation than the two months that was recorded over the last year.
What to Expect for Medicine Hat, Alberta Housing Market
With prices in Medicine Hat rising slightly month-over-month, it is evident that increasing demand for housing in the area and a lack of appropriate supply are impacting this local market. Should these trends continue, the market will continue to tighten, and Medicine Hat property prices will continue to inch skywards.
However, industry observers are hopeful that as we shift into a new post-pandemic normal, the demand for housing in more remote communities like Medicine Hat will decrease, supply will increase, and the local market will begin to level out in the early months of 2022.