In Alberta, housing prices are still well below the national average, but residents are facing escalating bills for shelter as more people relocate to the province
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Alberta’s housing market is heating up and there are more signs it’s going to continue to sizzle throughout 2024.
Two new reports examining the country’s real estate market forecast that home sales and prices in Alberta will continue advancing at a rapid clip this year.
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A forecast released by the Canadian Real Estate Association (CREA) indicates home sales in the country will increase by 10.5 per cent this year, with Alberta leading the way.
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Provincial housing sales are expected to jump by 13.6 per cent from 2023, before cooling off next year.
Average house prices across Alberta will climb by seven per cent in 2024 — tops in the country — to almost $480,000, but well below the national average of $710,000, up 4.9 per cent.
“It’s a double-edged sword because it’s great if you are a homeowner in Calgary or Edmonton and your house makes more than you will this year,” CREA senior economist Shaun Cathcart said in an interview.
“But it’s not so great if you’re a first-time homebuyer competing against people who have way more money than you.
“But, definitely, the biggest growth in home prices in the country right now is in Calgary and Edmonton.”
A separate report by Royal LePage released on Friday projects housing prices in Calgary will increase to $717,000 by the end of the year, up eight per cent from a year earlier, although slightly below the national average jump.
Edmonton house prices are expected to climb by 6.5 per cent this year to $458,000.
Corinne Lyall, broker and owner of Royal LePage Benchmark in Calgary, said sales in the local real estate market are “fervent,” as most newly listed properties are quickly bought up and inventory levels remain tight.
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“I have many anecdotes of individuals who’ve attempted to buy a house three, four or five times, and not been successful. That can create a lot of angst,” Lyall said in an interview.
“It just doesn’t feel like there’s an end to it.”
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The two reports highlight how Alberta’s real estate market has accelerated, even as higher interest rates have cooled demand in other parts of the country.
Earlier this month, an RBC study on housing affordability said Calgary is “Canada’s current hot spot.”
Meanwhile, Alberta continued to have the fastest-rising rents in Canada, soaring by 18 per cent for purpose-built apartments and condos over the past year, according to a report by Rentals.ca.
Average monthly rents in the province jumped to $1,728 in March, but remain below the Canadian average of $2,143.
The federal government has been under intense pressure to find solutions to resolve a housing crunch across the country and cabinet ministers have made a series of announcements in the run-up to Tuesday’s budget.
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Prime Minister Justin Trudeau unveiled Friday a new housing plan that the government says will lead to 3.87 million new homes being built in Canada by 2031.
In Alberta, housing prices are still well below the national average, but residents are facing escalating bills for shelter as more people relocate to the province.
The province’s population grew by more than 200,000 people last year, easily outpacing the 35,000 new housing units that were built.
“Alberta is creating new households at more than twice the rate of new homes that we can build — or ever have built,” Scott Crockatt, a vice-president with the Business Council of Alberta, said Friday.
“There’s going to be just a huge gap, in terms of the number of homes that we need for the number of new folks who are moving here.”
Governments at all levels need to ensure there is land available for new homes, skilled labour to construct them and timely approvals to get units built, Crockatt added.
In Alberta, a growing economy, a strong employment market and a population boom are stoking demand for homes across the province.
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And while prices are rising, house prices remain relatively affordable compared with other provinces.
A detached house in Alberta can be acquired for less than $500,000, compared with more than $1.2 million in parts of Ontario, Cathcart said.
“People are obviously willing to move around the country in order to look for housing affordability,” he added.
“Alberta is right in the middle of that story right now.”
Asked about home prices in Alberta, Premier Danielle Smith said last week the province is hearing stories of people purchasing homes in Edmonton and commuting to Vancouver each week.
“We certainly do not want to have the housing crisis that we see in Toronto and Vancouver, where attainable housing is just out of reach of most young people,” Smith told reporters.
“We certainly are not going to allow for that situation.”
Royal LePage noted that Canadian home prices haven’t fully recovered from a correction in many regions, with prices still down more than five per cent from peak levels seen two years ago.
Home sales across the province were up 26 per cent through the first three months of the year, while average prices jumped 11 per cent, according to Alberta Real Estate Association data.
Listings were down almost 25 per cent in March from a year earlier.
The housing market pressure that hit Calgary earlier is now showing up in other communities in the province, said Charles St-Arnaud, chief economist with Alberta Central.
“Strong growth, weak new listings, low inventories — it creates big pressure on pricing,” said St-Arnaud.
“The strength has been more broad-based across the province than it’s been before.”
Chris Varcoe is a Calgary Herald columnist.
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