Sometimes, waiting can be a pricey move.
A buyer in Calgary today will need to earn $18,820 more in annual income to purchase the same house, compared to this time last year, according to a fresh report from Ratehub.ca, an organization that analyzes real estate and financial data.
As well, Calgary is the only city in the study to see an increase in the average price of a home from March 2022 to March 2023. It’s gone from $523,100 to $528,700.
A longtime real estate agent says Calgary is an anomaly.
“What we are seeing this year, in January, we were all anticipating there would be more inventory coming on the marketplace,” Len T. Wong of Greater Property Group told CBC News in an interview.
“And then in February, we started to realize that sales volumes were down 47 per cent and inventory levels were down as low as 2006, an all-time low.”
Inventories of single-family homes in the city are low, and that’s a double-edged sword.
“I think part of it is interest rates,” Wong said.
“There’s a little bit of a concern that people signed up in the last couple of years, they may have gotten a great rate, under two per cent. They are now realizing that in the next two or three years, that interest rate is going to double or triple.That is one of the concerns.
“We have seen that people want to sell but there is no inventory. You have the Catch 22: you can wish for what you want for the price of your home but where are you going to go? We have had to have possession dates shifted .The rental market has jumped up immensely. Prices have gone up almost 30 to 40 per cent. That has caused people who have rented for the last three to five years to consider buying.”
And it’s possible that rates could go down in coming months, said a senior economist with the Canadian Real Estate Association (CREA).
“The Bank of Canada reiterated they think inflation will now be back to their target range, so under three per cent by this summer. So it’s happening really fast. That means rate cuts could be coming sooner than people think,” Shaun Cathcart said in a YouTube CREA podcast.
“The biggest news from the March numbers was that the MLS home price index appeared to be stabilizing across most of the country. New listings were at a 20-year low.”
The Calgary market, says Wong, actually benefits from all the people moving here.
“We had about a 30 per cent migration rate of people coming here from out of town. That’s what caused our market to stay stable. People are still coming to town. So we are still getting the same rate of interest but with no inventory, so that’s why prices have stabilized.
“We feel the marketplace over the next 60 days is still going to be very tight, but by mid-year I think you are going to see it loosen up a bit. I think we still need to absorb what we are getting.”
The increase in income required includes factors like increased interest rates, stress tests and average home prices.
For Cathcart, though, the next few months could be positive for the market.
“With few exceptions, prices are no longer falling across most of the country. They are not rising meaningfully anywhere either yet,” he said.
“The whole ‘turning the corner’ narrative is playing out as expected in most of Canada — not all, but nationally for sure.”
The national average home price is forecast to recover by 4.7 per cent from 2023 to 2024, to around $702,000.