Calgary real estate prices have been on a decline with the city’s housing market ranking at #7 of 16 Canadian cities when it comes to housing affordability, according to the 2020 RE/MAX Housing Affordability Report. While affordability is already one of the region’s biggest draws, cost-conscious home hunters in search of even better prices can find them in the communities of Pine Ridge, Martindale and Abbeydale, which have been named the most affordable neighbourhoods to buy a home in Calgary.
Factors contributing to Calgary real estate prices
Calgary real estate prices have been on the decline, experiencing an 3.7-per-cent decrease from 2018 to 2019, and no expected change is expected this year (source: 2020 Housing Market Outlook Report). With the prices on the decline, Calgary lands in the middle of the pack when it comes to Canada’s most-affordable housing markets, according to the new RE/MAX Housing Affordability Report.
In its inaugural Housing Affordability Report, RE/MAX examined 16 of Canada’s most-populous regions and ranked them on an affordability scale, with #1 being the most affordable and #16 being the least affordable. RE/MAX brokers were surveyed about average home sale prices and whether they believe real estate in their region is overvalued, undervalued, or right on the money. Calgary real estate came in at #7 of 16 cities. Canada’s most affordable city to buy a home is Regina (#1) and the least affordable place to buy a home is Vancouver (#16).
RE/MAX’s affordability ranking was determined by assessing the percentage of a buyer’s monthly income needed to carry a mortgage, assuming a down payment of 25 per cent, and based on the forecasted 2020 average sale price per region and the forecasted 2019 average household income.
Calgary is currently an undervalued market due to the prolonged recession facing the province. The total average sale price currently sits at $484,601. First time home buyers are most commonly seeking condominiums, which range on average from $140,000 to $300,000.
Younger and first-time home buyers are having to rely on support from parents to meet the required down payment and enhance affordability, but have yet to venture into property co-ownership, which has been an emerging trend in other regions.
At the high end of the affordability spectrum, the Calgary’s least affordable neighbourhoods include Upper Mount Royal, Bel-Aire and Pump Hill.
Despite the commonly held notion that housing in Canada is unaffordable, the report finds that the vast majority of Canada’s largest urban centres (75 per cent) are currently undervalued, according to a survey of RE/MAX brokers in 16 of Canada’s most-populous cities.
In its report, RE/MAX explored the most popular property types sought by first-time homebuyers, the least and most affordable neighbourhoods in each of the 16 housing markets, factors preventing buyers from entering the market, and methods homebuyers are using to enhance the affordability of homes. Current and prospective Canadian homeowners were also surveyed about their sentiments around home ownership, barriers to owning a home, financial factors impacting home ownership, and what could potentially improve housing affordability.