Calgary to continue as a balanced market in 2021, prices to increase 3%
Calgary real estate is likely to continue as a balanced market in 2021, with ongoing economic factors related to the oil and gas sectors, as well as COVID-19, expected to impact market activity. Further lockdowns due to COVID-19 will impact housing activity as open houses will likely stop. The average sales price in Calgary increased 0.03% to $458,742 in 2020 (Jan. 1 – Oct. 31), compared to $458,600 in 2019 (Jan. 1 – Dec. 31). The RE/MAX Outlook for Calgary real estate in 2021 is an increase of 3% in average price to approximately $472,504.26.
Who’s Driving Demand for Calgary Real Estate?
Move-up buyers and first-time homebuyers are currently driving demand in the Calgary real estate market, which is expected to continue into 2021. The most popular property type among these buyers are single-detached homes.
First-time homebuyers in Calgary are typically single homebuyers and young couples, looking for single-detached homes. These properties range in price from $350,000 to $475,000. While first-time homebuyers were initially hesitant to buy, many have decided to purchase due to low interest rates.
Move-up buyers in the Calgary housing market are typically families who have been in their home for a number of years, and whose jobs haven’t been affected by COVID-19 or the economy. There has been no real hesitation from move-up buyers who are looking to purchase a new home due to the current climate in 2020. Many of those who are buying have gone through a 5-year recession and have jobs that have been unimpacted by COVID-19.
The condominium market in Calgary is most popular with single homebuyers and retirees/downsizers. The average price for a condominium in Calgary is $226,220. There is currently 7 months of supply for condominiums in Calgary, and this is not expected to improve in the next 1-2 years due to the large number of used properties, as well as lots of new construction.
Calgary’s luxury market is currently driven by move-up buyers with the average starting price for a luxury home in Calgary being $750,00. While COVID-19 has not directly impacted the luxury market in Calgary, it has impacted the economy, which is expected to be a long-term impact.
Calgary’s Hottest Neighbourhoods
Calgary’s top-selling neighbourhoods in 2020 were North Central, South Central and North West/Central West. North Central is popular due to its proximity to both the airport and downtown, which South Central is a newer area that is close to the hospitals. These neighbourhoods are expected to continue to be in-demand in 2021 because of their access to amenities and transit.
Calgary New-Home Construction
Calgary’s new-home construction sales are down currently, with many developers currently looking for land to build on. There was a project that was turned down a few months ago, as the developers did not want to take on more expenses due to COVID-19 and the current economy. The number of homes currently being built in Calgary is sufficient to meet the current demand, and new-home sale prices are very competitive compared to the resale market.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”