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BY: BIC | MARCH 1, 2024

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Calgary’s housing market is mostly positive, but 2024 continues the way 2023 ended: with trend-setting flux. Conventional single family, detached homes are down. Multi-family is up. And rentals are hot, verging on unaffordable.


According to the CMHC 2023 Housing Supply Report, housing starts for all Calgary housing types increased more than 62 per cent, year over year, while single-family detached home starts fell about 11 per cent year over year. Multi-family/apartment starts surged 175 per cent. CMHC also tracked that row starts also increased slightly, and semi-detached starts were also down.


Taylor Pardy, CMHC’s senior specialist, Market Insights is knowledgeable and upbeat, explaining that CMHC does not editorialize but strictly looks back on actual facts, figures and projections. “Calgary housing starts for 2023 were up by 11 per cent, from 2022, which was a record year.


“Some of the primary factors impacting Calgary housing starts included continued strong population growth driven by both international and interprovincial migration. Between the latter half of 2022 and the first half of 2023, Alberta saw net in-migration of almost 169,000 people, including over 112,000 international migrants and over 56,000 interprovincial migrants.”


He also notes the relative affordability of Calgary versus other large metropolitan areas such as Vancouver and Toronto. “It has been a key driver of interprovincial migration, with roughly 70 per cent of net-interprovincial migration into Alberta coming from B.C. and Ontario. Other Calgary housing positives are a growing economy and robust job market, with overall employment in Calgary up 2.8 per cent, year-over-year, and the job vacancy rate remaining relatively high at 3.9 per cent.”


Pardy points out other Calgary housing supply-side factors such as low existing home and new home inventories, resulting in upward pressure on home prices, necessitating more new construction to try to meet demand. “Unlike other parts of the province, such as Edmonton, existing and new home inventories have been persistently low even as buyers faced higher mortgage rates.”


Calgary realtors and market analysts agree about the significant impact of multi-family and pricey and scarce rentals on the Calgary housing landscape.


The CMHC Report highlights specifics that:

Purpose-built rental apartment starts have overtaken condominium apartment starts for the first time. Purpose-built rental starts hit quarterly highs, with large projects throughout the northwest quadrant and city outskirts.

Ground-oriented multi-family homes such as townhomes and duplexes continue to become more popular as an alternative to single-detached homes as prices and mortgage rates increase.


As detailed by the Calgary Real Estate Board (CREB), 2024 continues with drastically low Calgary re-sale inventory, with fewer listings than buyers and both impacted by surged mortgage rates.


The CMHC Report also analyzed that, with higher mortgage rates than previous years, potential homebuyers have more restricted budgets, especially those buyers looking to purchase single-detached homes, since they are likely to be the most expensive home type. Builders of single detached homes are likely to slow planned building as demand continues to be impacted.


When it comes to housing – single, detached homes or rentals – affordability is every community’s critical factor. While Calgary continues slightly more affordable than other major Canadian areas, Calgary rental rates have spiked more than any other part in the country.


With hefty hikes, the average rent for a residential rental in Alberta last year was $1,876, making the Calgary rental market just slightly more affordable than provinces like B.C. and Ontario, according to stats from Rentals.ca.


A two-bedroom unit in Calgary, for example, rents for nearly $2,110 on average, whereas a similar apartment costs $1,605 in Edmonton and roughly $1,445 in Fort McMurray.


The affordability factor, for new builds, re-sales and rentals is a timely topic for Calgary. Last year, there was much discussion, deliberation and City focus about Calgary experiencing a housing crisis. According to City stats, one in five Calgary households are unable to afford where they currently live. Nearly 85,000 area households are spending more than a third of their income on housing. It is why, late last year, City Council approved Home is Here, Calgary’s Housing Strategy with amendments to address the affordability crisis.


The City warned that Calgary’s competitive advantage as one of the world’s most livable cities, where housing is relatively affordable, is at risk due to low vacancy rates, higher than normal rent increases and increasing home prices.


The City’s focused masterplan for housing was adopted last fall, with specific priorities like:

Making use of City–owned sites for emergency housing for families
Having incentives for downtown office conversions to support students
Investigating business licensing for residential landlords
Considering infrastructure investments for increased densities
Adding reporting considerations for planning application processes


Calgary’s housing market may have cooled off a bit from 2023’s hot market and is an encouraging positive for 2024. “We anticipate Calgary’s economy to continue to grow this year, but at a slower pace given the impact of higher interest rates on the overall domestic economy, for which Calgary will not be completely immune,” CMHC’s Taylor Purdy projects.


“We anticipate sustained international and interprovincial migration will continue to be supportive of housing demand in 2024, necessitating potentially similar levels of construction to 2022 or 2023. Our forecasts present a range of scenarios with housing starts coming in at 12,700 at the low end and 18,900 at the high end.”

BY: BIC | MARCH 1, 2024