Behind the big boom in Calgary real estate

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A recovering energy industry, a reviving downtown commercial market, and a competitive tax environment – all at an affordable price – are working hand in hand to drive the recovery of Calgary’s real estate sector, according to industry watchers.

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Alberta’s largest city started 2022 on a strong note, setting a record for home sales in the first quarter.

Unit sales are up 58 percent from a year ago, with 9,413 homes exchanged, according to the Calgary Real Estate Board’s quarterly housing update report, released last week. That surpassed the previous record of 8,286 set in the first quarter of 2007, before the financial crisis. The city’s record price was $496,767, up 15 percent year-over-year.

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While gains lag behind those in the Greater Toronto Area (18 percent), Greater Vancouver (20 percent) and Montreal (17 percent), Calgary’s rebound comes after years of home price losses in the wake of the financial crisis and once again. Others during the oil downturn in 2015.

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The city’s growing popularity is contingent on a few factors, one of the biggest being inter-provincial buyers from Ontario and British Columbia who have turned to the Alberta market as a cheaper option to work or invest remotely.

“We see Ontarians who can work from home and still want a fairly big city, and love to be close to the mountains (who say), ‘I’m moving to Calgary but I still keep my old job, and prices are half, because why not?'” ”, Dan Eisner, founder and CEO of Calgary-based True North Mortgage, told the Financial Post.

“Then of course, we also see that oil prices have recovered significantly and as much as we residents of Calgary would like to expand our industries, oil is still a really big driver here,” Isner added.

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Oil is still a really big driver here

Dan Eisner

CREB noted that the jump in new listings was one factor driving up sales, with listings up 32 percent to 12,616 units compared to last year. But even as more homes reach the market, conditions remain tight by most measures.

“Conditions have not been so tight since 2006, which is also the last time we saw price gains cross 15 percent,” the report read.

Michael Waters, CEO of real estate developer Minto Group, told the Financial Post that he was seeing demand pick up as stocks remain low.

Stocks (in Calgary) are very low,” Water said. “It’s definitely in the seller’s market when you look at sales-to-list ratios and things like that. So Calgary has benefited – depending on how you look at it – or has been part of the same kind of phenomenon across Canada in terms of dwindling home inventories to be buy it.”

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Waters added that there is some debate about whether home sales in Calgary will strengthen with the rest of the country.

“In fact, we’ve already seen an improvement in the housing market there,” Waters said. “So home sellers were seeing relatively less supply competition, and if you were buying, you had to look a lot harder to find something and prices moved as well.”

Jared Chamberlain, owner of Calgary-based Chamberlain Group, said the shift has caught many in the industry by surprise.

“In mid-January 2022, we felt change was happening quickly. We saw 10 to 15 inquiries from out of town per day at that point to our team,” Jared told the newspaper in an email, adding that many were moving around the country looking for more options. reasonable prices. “He caught us off guard. We saw other buyers in 2021 doing the same, but the gates opened once the clock ticked back to 2022.”

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While energy is a strong driver in home prices in Calgary, Isner noted that there was less glut in the oil market this time around than in the 2006 boom, suggesting the deflation won’t be so stark now. The city was also able to diversify its economy and create more protection from shocks to the market.

“When I look downtown, there are a lot of IT companies opening their doors in Calgary,” Eisner said. “So Calgary has made some progress in diversifying its economy a little bit and that will support some prices even if oil crashes.”

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