The Calgary Real Estate Board reported that the city’s housing market had its lowest March inventory level in 17 years and home sales decreased by 40.6% annually in March. The benchmark residential home price increased by 1% annually and 2% monthly, creating market conditions that favor sellers. Migration is supporting demand, but low inventory levels are causing existing homeowners to be reluctant to list their homes due to difficulty finding an acceptable housing alternative and higher lending rates.

The Calgary Real Estate Board (CREB®) has released its 2023 Forecast Calgary and Region Yearly Outlook Report. The report, which is prepared by CREB® Chief Economist Ann-Marie Lurie, provides a detailed analysis of the economic and housing market trends in Calgary and surrounding areas for the upcoming year.

According to the report, elevated lending rates are expected to weigh on sales in 2023, bringing levels down from the record high in 2022. However, with forecasted sales of 25,921 in 2023, levels are still expected to be higher than the activity reported before the pandemic.

“Higher commodity prices, recent job growth, record high migration and relative affordability are expected to help offset some of the impacts higher lending rates are having on housing demand. At the same time, we are entering the year with low supply levels which are expected to prevent significant price declines in our market,” said Lurie.

Supply levels declined to the lowest levels seen in over a decade as gains in higher price properties did not offset the supply declines occurring in lower-priced homes. This has left our market in a situation where lower-priced properties still face sellers’ market conditions while higher-priced homes are seeing more balanced to buyers’ market conditions.

The shift between supply and sales by price ranges is expected to create divergent trends in prices depending on property type and price range. Overall, price declines in the upper end of the market are expected to offset gains reported in the lower ranges, causing an annual decline of less than one per cent.

“With much of the pandemic behind us, 2023 reflects more of an adjustment into more typical conditions and a pause on price gains following 12 per cent growth in 2022. While other markets in the country are forecasted to see more significant price and sale declines in 2023, Calgary did not face the same gains as those markets, as prices only recovered from the 2014 highs in 2021,” added Lurie.

–CREB® Economic Analysis

The Calgary metropolitan area’s population — which includes the City of Calgary and smaller communities such as Airdrie, Chestermere and Cochrane — crossed 1.6 million people in 2022

Calgary and its surrounding communities rank as the fastest-growing area in the Prairies, according to newly released Statistics Canada data.

The agency said the Calgary metropolitan area grew by 3.1 per cent between July 1, 2021, and July 1, 2022, the 13th-highest such rate across Canada.

The region, which encompasses the City of Calgary as well as some bedroom communities, including Airdrie, Chestermere and Cochrane, now has an estimated population of 1,608,342, up from 1,558,588 the previous year.

The growth is much-needed as the city continues to contend with a labour shortage, said Calgary Chamber of Commerce president and CEO Deborah Yedlin. That group found in a fall report 31.5 per cent of city businesses are concerned about gaps in workers.

“Obviously, people are seeing Calgary as a city of economic opportunity, that they can find employment that’s meaningful and that they can afford to live here,” Yedlin said.

“It’s great news for Calgary, great news for companies and great news for the labour situation, so hopefully it continues.”

The Calgary Metropolitan Region Board celebrated the growth, saying the gains are a testament to a high quality of life in and around the city.

That board is responsible for supporting the long-term sustainability of the region, which includes developing and implementing a growth plan.

Its current plan forecasts the Calgary region will have 2.46 million residents by 2048, with the city itself passing the two-million mark.

“We’re trying to grow more sustainably, focus our growth in ways that will save taxpayer dollars and have a lower environmental footprint, lower water use, less agricultural land used up, and have thoughtful planning around thinking like transit, recreation, police,” said Clark.

“Regional planning is a long-term process, but we’ve already seen some really positive results.”

BILD Calgary, an industry group representing local land developers, said strong growth out of the COVID-19 pandemic is welcomed but does come with some challenges in maintaining sufficient housing stock.

“When COVID hit, all expectations at that time was that it would continue to be slow, but it didn’t. It was pretty much the opposite,” said BILD CEO Brian Hahn.

“Calgary remains one of the most affordable metropolitan regions in Canada to buy a home … That’s driving, certainly, some of the growth from outside of Alberta to our community.”

In its report, Statistics Canada said the country’s large urban areas saw a population rebound in the past year, with many experiencing their highest growth rates in two decades. Canada as a whole grew by 2.1 per cent during the period, a 573,604-person increase as the country’s population now crests 39 million.

It’s a trend largely driven by immigration, with Canada’s population growing by 657,833 from international migration alone, the greatest such increase since 1971–72 — growth that corresponds to fewer COVID-19 restrictions, increased immigration targets from Ottawa and the acceptance of people fleeing Russia’s invasion of Ukraine. The Calgary region welcomed 25,622 immigrants in 2021–22.

“Net international migration to Canada was up substantially, even when compared to the pre-pandemic period,” Statistics Canada said.

All regions of Alberta saw net population gains from interprovincial migration.

Banff was Canada’s second-fastest growing urban area, with a 7.5 per cent increase. Didsbury and St. Paul had among Canada’s highest rates of population decrease, at 2.5 per cent each.

Growth was highest in Atlantic Canada, with the Moncton and Halifax areas topping the list with 5.4 per cent and 4.5 per cent population growth, respectively.

Alberta had the five fastest-growing regions in the Prairies, with Canmore, Sylvan Lake, Edmonton and Lethbridge joining Calgary on that list. Outside of Alberta, Saskatoon — the 33rd-fastest-growing region in Canada — ranks highest in the Prairies.

Of Canada’s 12 regions that saw population decline in the last year, four were in Saskatchewan. That includes Estevan, whose 1.1 per cent population drop was the second-highest decrease in the country.

-Calgary Herald

The Bank of Canada today increased its target for the overnight rate to 4¼%, with the Bank Rate at 4½% and the deposit rate at 4¼%. The Bank is also continuing its policy of quantitative tightening.

Inflation around the world remains high and broadly based. Global economic growth is slowing, although it is proving more resilient than was expected at the time of the October Monetary Policy Report (MPR). In the United States, the economy is weakening but consumption continues to be solid and the labour market remains overheated. The gradual easing of global supply bottlenecks continues, although further progress could be disrupted by geopolitical events.

In Canada, GDP growth in the third quarter was stronger than expected, and the economy continued to operate in excess demand. Canada’s labour market remains tight, with unemployment near historic lows. While commodity exports have been strong, there is growing evidence that tighter monetary policy is restraining domestic demand: consumption moderated in the third quarter, and housing market activity continues to decline. Overall, the data since the October MPR support the Bank’s outlook that growth will essentially stall through the end of this year and the first half of next year.

CPI inflation remained at 6.9% in October, with many of the goods and services Canadians regularly buy showing large price increases. Measures of core inflation remain around 5%. Three-month rates of change in core inflation have come down, an early indicator that price pressures may be losing momentum. However, inflation is still too high and short-term inflation expectations remain elevated. The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.

Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target. Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.

-Bank of Canada