Calgary Real Estate Market Conditions

The Bank of Canada (BoC) has continued its aggressive monetary tightening policy with the highest policy interest rate among the G7 countries, currenting sitting at 3.25% as of September 7th.

In turn, Canadian banks have increased their prime rates to 5.45%.  The goal is to tamp down inflation that has been rampaging at a frenetic pace. Many financial institutions and experts are predicting these interest rates may trigger a 2023 recession.

How does this impact Alberta?

Alberta's economy is somewhat insulated from a market downturn. With world energy prices about to potentially increase this winter (if Russia continues its war efforts) then the Alberta government in conjunction with local energy companies are in good shape to cash in.  Our tech sector has gained some traction, surpassing 2021 numbers and spurring hiring and office expansions, all of which will be reflected in the overall Real Estate market health.  Net migration from more expensive provinces continues to fill job vacancies and will play a significant role in our real estate market in 2023.

In Calgary, interest rate hikes and recession worries have not had a notable effect on the market, due to the region’s relative affordability. In fact, Calgary is one of the only Canadian cities predicting a modest 3% price increase throughout the remainder of the year and it is projected that Alberta will likely lead the nation in job growth and economic growth over the foreseeable future.

What does 2023 look like?

It is difficult to say whether the BoC will increase interest rates as aggressively in 2023 as it has done in 2022 and there is quite a bit of chatter about a pivot, to soften the blow. Inflation in Canada peaked at 8.1% in June and has declined for the past three months. That is welcome news, but inflation will not fade away by itself and rate increases will take some time to work through the system.

Buyers hoping for significant drops in single-family home prices in Calgary will likely be disappointed. Our prices will continue to be more stable with more upward growth potential than many other areas of Canada. We did not experience the rapid growth in home prices over the pandemic or even in the last 10 years that many other regions in Canada experienced.

Our province will continue to be an attractive and affordable region for growing families starting their real estate adventures as well as investors who are hoping for future value growth of their assets.

Posted by Kirby Cox on


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