Calgary’s rising house prices, low inventory persist along with high levels of interprovincial migration

March reflects strong seller's market and price increases in Calgary CANADIAN PRESS/Sean Kilpatrick. skp

New figures from the Calgary Real Estate Board show that the seller’s market continues in Calgary along with higher prices for homes.

New listings were up but still below what would normally be seen in Calgary at this time of year, which means the supply situation hasn’t improved.

The Calgary Real Estate Board says March home sales were up 9.9 per cent from this time last year as interprovincial migration to Alberta contributed to the tight supply of homes.

“We have not seen March conditions this tight since 2006, which is also the last time we reported high levels of interprovincial migration and a months-of-supply below one month,” said Ann-Marie Lurie, chief economist at CREB in a news release on Monday.

“Moreover, we are entering the third consecutive year of a market favouring the seller as the two-year spike in migration has driven up demand and contributed to the drop in re-sale and rental supply. Given supply adjustments take time, it is not a surprise that we continue to see upward pressure on home prices.”

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Sales in March showed a 10 per cent year-over-year gain. The largest gains were in northeast and east districts of Calgary.

Inventory levels declined across properties priced under $1,000,000, with the steepest declines in homes priced below $500,000.

In March, the unadjusted total residential benchmark price rose to $597,600, which is nearly 11 per cent higher than last year.

Prices have increased across all property types, with row and apartment-style homes seeing the most significant gains.

Low inventories compared to sales were behind further price gains, according to the March CREB report.

The unadjusted detached benchmark price rose to $739,700, which is a year-over-year gain of 14 per cent.

The situation isn’t much better for people looking for a home in Cochrane or Okotoks.

The prices are lower than Calgary but they are creeping up in those communities as well and inventory is dropping.

In Cochrane, prices went up across all property types, and detached prices rose above $650,000 for the first time.

South of Calgary, Okotoks continues to have supply issues.

The 71 new listings that came on the market were met with 65 sales.

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Limited supply and strong sales caused the months of supply to fall below one month, and March was the lowest March reported since 2006.

Tight conditions drove price growth this month in Okotoks with the total residential benchmark price increasing  to $610,700 – a year-over-year increase of nine per cent.

Corinne Lyall, broker and owner of Royal LePage benchmark in Calgary, said the latest numbers are not surprising. She said Calgary has been a sellers’ market since around 2021.

“We certainly are anticipating this kind of sellers’ market, at least for the next year and a bit,” she told Global News.

Lyall said Calgary doesn’t have enough resources to house people who are moving to the city. Calgary’s vacancy rate (1.4 per cent) tied with Toronto’s in 2023, according to a Canada Mortgage and Housing Corporation report, making it the second-lowest vacancy rate out of the six largest Canadian markets.

However, Lyall said this isn’t a Calgary-specific problem.

“We don’t have the infrastructure or the housing to support more people coming into our country. That’s not just (Calgary); it’s across the country. The urban centres are having a tough time trying to find housing for people,” she said.

“In Calgary, we have such a strong real estate market right now. It’s really tight for people to be able to find someplace either to rent or to buy.”

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Lyall added houses in Airdrie and Cochrane are rapidly becoming unaffordable.

“People are anticipating that prices will be lower but I don’t know that’s really true,” she said. “Those markets are also tight, Airdrie especially … (What) was considered an affordable place to buy is rapidly not that anymore.”

The real estate broker said it is hard to predict what might happen to the housing market. Either interest rates increase and people move because they can’t afford their mortgages anymore, or interest rates decrease which may result in more houses being put up for sale and more buyers being able to get into the market.

–With files from Paula Tran, Global News.

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