Housing Supply in Calgary and Surrounding Areas is Up Despite Strong Demand

Sales remain sluggish but Calgary’s inventory of homes above the benchmark price is on the rise.

By Brett Surbey | 4 minute read

Though Calgary’s housing market still remains tight, supply levels are improving as homes above $1 million are sitting at three months of supply for October.

Compared to the near-record lows in 2023, Calgary’s housing inventory levels seem to be turning a corner. While sales are still sluggish, they are up slightly compared to the previous year.

According to October’s real estate report from the Calgary Real Estate Board (CREB), Alberta’s southern hub saw 2,174 sales across all housing types — that’s around 24% above long-term trends for October. Compared to October of last year, sales are only up 0.2%, however, supply levels are up to 4,966 units compared to 3,025 in October 2023. 

“Housing demand has stayed relatively strong in our market as we move into the fourth quarter, with October sales rising over last month,” says Ann-Marie Lurie, Chief Economist at CREB. “However, activity would likely have been stronger if more supply choices existed for lower-priced homes,” she adds in the recent news release. 

Calgary’s inventory looks different this time around as “half of all the residential inventory is priced above $600,000,” the report states. With the benchmark price hovering around $592,500, most of the homes available are above what market participants may be used to. Overall, conditions are still “relatively tight” according to the report, with 2.3 months of supply and a sales-to-new listings ratio of 67%. This ratio shows Calgary’s market is still favouring sellers.

Supply conditions vary depending on price and property type

The amount of inventory available depends on the price range homebuyers are looking for, CREB notes. Homes under $700,000 are showing less than two months of supply, whereas homes over $1,000,000 are showing over three months of supply. “This is likely resulting in different price pressures depending on price range and property type,” the report points out. 

Homes in the $700,00 to $999,999 range make up 1,100 (~20%) of the total housing supply. Combined with homes above $1,000,000, that ratio rises to 34% of Calgary’s total inventory. 

Detached, semi-detached and row houses all show inventory levels above two months of supply. Row-style properties have hit above the two-month threshold for the first time since 2021, according to the CREB. 

Only apartment condos have supply levels over two months: they’re currently sitting on 2.84 months of supply. 

Condos see biggest price gains

“Overall, the total residential benchmark price was $592,500 in October, over  4% higher than last October and on a year-to-date basis, averaging over 8% higher than last year’s levels,” according to CREB’s report. 

Detached, semi-detached and row properties all saw price increases of 8% year-over-year, putting their benchmark totals at $753,900, $677,000, and $456,600, respectively. Again, apartments saw the most notable increase of 11%, up to $341,700. CREB attributes higher lending rates, rising rents, and limited supply choices to the increased demand for condos. 

The year-to-date price across all property types averages around 17% higher than levels reported in 2023.

Supply up in surrounding areas

Calgary isn’t the only southern Alberta area to see supply levels start to creep up. Airdrie saw inventory levels jump to 365 units, up from 213 units last year. Okotoks also saw a 64% spike from last year’s inventory. The area had 103 units available in October compared to 66 a year ago.

Cochrane also saw slight inventory increases. According to CREB, “Recent gains in new listings relative to sales have helped support some steady gains in inventory levels.” That said, the smaller city only had 178 units available in October or 2.3 months’ worth of supply, which is still below long-term trends.

BoC’s latest cut could fuel demand

Though Calgary and surrounding areas are moving away from tighter conditions, the Bank of Canada’s recent interest rate cut could begin stoking a demand-fuelled fire.

“Activity in Canada’s housing market has been sluggish in many regions due to higher borrowing costs, but today’s more aggressive cut to lending rates could cause the tide to turn quickly. For those with variable rate mortgages – who will benefit from the rate drop immediately – or those with fast-approaching loan renewals, today’s announcement is welcome news indeed,” CEO and president of Royal LePage Phil Soper told Global News in response to the October 23 rate cut.

Soper sees the latest 50 basis-point cut as a way to get many homebuyers off the sidelines and into the market, noting that the increase in demand could result in an early spring market.

However, rising demand from interest rate cuts may not necessarily be a good thing. One TD report noted, “While rapid rate cuts can relieve mortgage pressures, they also stoke risks. Restoking housing demand, pulling forward consumer spending, weakening purchasing power and dampening investment through a softer loonie. Indeed, there is such a thing as too much of a good thing.”