2018...migration last year, with expectations of further improvements into 2018. the opposing...

2018 Calgary Economic & Housing Outlook

©2018 CREB®. All rights reserved.

The forecasts included in this document are based on information available as of December 2017. Prepared by Ann-Marie Lurie, CREB® chief economist.Edited by Terence Leung and Tyler Diffley. Designed by Sarah Maynes and Haley Steel.

300 Manning Road NECalgary, AlbertaT2E 8K4, Canada

Phone: 403-263-0530Fax: 403-218-3688Email: [email protected]

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Forecast Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Regional Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Lending Market and Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Labour Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Housing Market Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Rental market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

New home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5

Resale market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Detached sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Attached sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Apartment sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

District Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Surrounding Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Airdrie. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Okotoks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Cochrane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 3

THE HOUSING MARKET IS EXPECTED TO CONTINUE MOVING TOWARDS RECOVERY IN 2018, BUT CHALLENGES REMAIN.

Housing market conditions are expected to remain

relatively unchanged in 2018, as the impact of

higher lending rates and stricter lending criteria are

offset by modest improvements in the economic

climate. Recent changes may have prolonged

the recovery period in our market, but it is not

expected to completely derail the transition.

The path to recovery is expected to be bumpy,

as the market adjusts to a new normal. We

are entering 2018 with elevated supply levels

and an environment of rising rates paired with

stricter lending criteria. However, the improving

economy generated modest job growth and net

migration last year, with expectations of further

improvements into 2018.

The opposing impacts of the changes in the lending

environment and economic gains are expected

to cause adjustments in demand/supply balances

based on price range and product type, creating

pockets of over/under supply and generating

different paths of price recovery. Overall, it is

expected to generate conditions comparable to

2017 and the dynamics within each sector of the

market will vary.

Minimal changes in sales activity are expected to

be met with easing new listings for some property

types, limiting the upward pressure on supply. This

should help support more balanced conditions,

preventing widespread benchmark price declines.

More balanced market conditions will be led by the

attached and detached sectors of the market, while

the apartment sector will continue to struggle with

excess inventory in 2018. Prices will likely continue

to face some downward pressure in the apartment

sector, with stabilization not expected until the

latter portion of the year.

The attached sector may benefit from changes

in distribution, as some demand shifts from the

detached sector to the attached sector of the

market, supporting modest price gains of 0.38

per cent. Easing demand in the detached sector is

expected to be met with easing listings, supporting

overall stability in pricing.

FACTORS CONTRIBUTING TO STABILITY IN THE CALGARY HOUSING MARKET:

• Improvements in the economic climate countering the impact of changes in lending criteria .

• Employment growth and reduction in the unemployment rate .

• Modest gains in migration .

• Easing vacancy rates in the rental market .

• Relative affordability in the market .

• Improved confidence in the overall economy .

-10%

-5%

0%

5%

10%

15%

0

5,000

10,000

15,000

20,000

25,000

30,000

‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Calgary Sales and Price Growth Forecast

Source: CREB®ForecastDetached Attached

Apartment10 Year - Average

Price growth

FORECAST SUMMARY

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK4

UPSIDE/DOWNSIDE OUTLOOK RISK:

• Stricter lending criteria and rising rates has a greater than expected impact on demand for housing, causing downward pressure on prices .

• Any significant shifts in the energy sector could affect employment and confidence in the market, influencing overall housing activity .

• If unemployment levels remain elevated this could weigh on demand and prevent easing in supply levels .

• If employment growth, wages and net migration improve at a faster pace than expected, stronger than expected demand growth in 2018 may occur .

• High office vacancy, drop in rents, housing availability in all price ranges, and the available pool of skilled labour could help attract business investment to the city .

• Changes to NAFTA could cause uncertainty in the market, impacting economic growth .

FORECAST TABLE 2015 2016 2017(F) 2018 (F) Forecaster

Economic Indicators

Alberta GDP Growth -3.69% -3.83% 6.69% 2.09% Conference Board of Canada

Calgary CMA GDP Growth -3.30% -3.65% 7.12% 2.46% Conference Board of Canada

Calgary CMA Employment Growth 2.04% -1.49% 3.41% 2.13% Conference Board of Canada

City of Calgary Net Migration 24,900 -6,527 974 1,900 City of Calgary

Housing Starts: Single Family Calgary CMA 4,138 3,489 4,423 4,678 Conference Board of Canada

Housing Starts: Multiple Family Calgary CMA 8,895 5,756 7,111 6,798 Conference Board of Canada

Calgary CMA Two-bedroom Average Rent 1,322 1,258 1,247 1,250 CMHC

Calgary CMA Vacancy Rate 5.30% 7.00% 6.30% 6.00% CMHC

Overnight Bank of Canada Target Rate 0.65% 0.50% 0.70% 1.38% Royal Bank of Canada

WTI Price ($USD) $48.67 $43.33 $50.79 $55.33 U.S. Energy Information Administration

Henry Hub Spot Price ($USD) $2.73 $2.61 $3.12 $3.24 U.S. Energy Information Administration

2015 2016 2017 2018 (F) Forecaster

MLS® System resale market

City of Calgary

Sales 18,839 17,796 18,882 18,853 CREB®

Price growth 1.06% -3.73% -0.17% -0.13% CREB®

New listings 33,876 32,269 34,130 34,354 CREB®

City of Calgary detached

Sales 11,517 11,206 11,831 11,680 CREB®

Price growth 1.17% -2.98% 0.63% -0.10% CREB®

City of Calgary attached

Sales 4,098 3,865 4,182 4,276 CREB®

Price growth 1.71% -4.23% -0.13% 0.38% CREB®

City of Calgary apartment

Sales 3,224 2,725 2,869 2,898 CREB®

Price growth 0.09% -5.97% -3.97% -1.00% CREB®5

Economic growth throughout the province

exceeded expectations in the first half of 2017.

Annual estimates of over four per cent GDP

growth in 2017 place Alberta as the fastest

growing economy.

This needs to be put into perspective, as the

Alberta economy shrunk by 3.7 and 3.8 per

cent in 2015 and 2016. Growth in 2017 does not

compensate for all losses over those years. Some

may point towards another boom, but this is not

the case, as current economic activity remains

below pre-recession levels.

Most forecasters anticipate provincial economic

growth to ease to just over two per cent in

2018, but most forecasters do not expect a full

recovery from the recession to occur until 2019.

However, the province is moving into the phase of

slow recovery and this is a welcome change from

the past several years.

In Calgary, 2017 also marked the end of the two-

year recession and further gains are expected

in 2018. Despite the two-year growth, overall

economic activity is expected to remain below

2014 output. Growth figures appear strong,

but this is over a lower base level, as Calgary

has not experienced two consecutive years of

recession since the ’80s. Overall, fundamentals

are supporting a modest recovery to span over

the next two years.

REGIONAL ECONOMY

GDP Growth Comparison

‘18 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

ForecastSource: Statistics Canada,

Conference Board of Canada Forecast.

-6%

-4%

-2%

0%

2%

4%

6%

8%

Calgary GDP growthAlberta GDP growth

Canada

Industry Share by Total GDP - Calgary 2016

Source: Statistics Canada,Conference Board of Canada

32%

7%4%

5%4%

5%7%5%4%

3%

2%1% 2%3%

16%

Primary & Utilities

Public Administration

Other Services

Construction

Manufacturing

Transportation & Warehousing

Technical & Professional Services

Wholesale Trade

Retail Trade

Information and Cultural Industries

Finance, Insurance and Real Estate

Healthcare & Social Assistance

Educational Services

Accommodation & Food Services

Arts & Entertainment


Throughout the recession, 70 per cent of our industries recorded a contraction in

growth. Not all industries have seen their GDP rise to 2014 levels, but most saw some

rebound in economic growth in 2017. Moving into 2018, growth is expected to be

broader based, as most of the sectors are expected to see an increase in activity. The

only sectors expected to see GDP levels remain below 2014 figures include construction,

manufacturing, information and cultural industries, and other services.

GDP Growth by Industry - Calgary

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20162015 2017(F) 2018(F)

Primary & Utilities

Construction

Manufacturing



Wholesale Trade

Retail Trade

Information & Cultural Industries

Finance, Insurance & Real Estate





Other Services


TOTAL

Source: Statistics Canada,Conference Board of Canada Forecast.

ECONOMIC GROWTH BY INDUSTRY:


The rebound in the oil sector is playing out

as many had expected: slowly. West Texas

Intermediate (WTI) prices in 2017 have improved

from the lows of the past two years, but

struggled to push above the $50 level throughout

most of 2017.

Many petroleum producers adjusted operations

to support a longer time frame of lower oil prices.

This mostly involved cost cutting, focusing on

efficiencies and reviewing their portfolio of

assets. There will likely continue to be pockets of

readjustments, but this restructuring has enabled

companies to be better suited to operate in a

lower-price environment.

As we move into 2018, the expectation is WTI oil

prices will remain bound between $50 and $65

per barrel. OPEC and Russia agreed to extend the

supply reduction this year, however, additional

supply may come from non-OPEC sources,

preventing stronger price growth. While oil prices

are significantly higher than the $30 monthly

lows recorded during the recession, levels are

not high enough to encourage any significant

increase in new investment spending.

Companies are expected to continue to focus on

best returns, placing some limits on investment

growth in Canada. Heightened uncertainty

regarding the regulatory process, combined

with low energy prices, has impacted investment

activity in our energy sector. Estimated energy

investment is less than half of the level recorded

in 2014.

Some improvements are expected over the next

few years, but investment activity will remain

well below levels recorded 2011 - 2015, limiting

the growth for energy sector jobs. Slower energy

sector employment growth will filter through

many aspects of our economy, including the

housing market.

Pipeline capacity issues will continue to weigh on

the market and impact the differentials between

the WTI price and the Western Canadian Select

(WCS) price that we receive for our commodity.

Earlier optimism regarding pipeline developments

was overshadowed by cancellations and delays.

There is also skepticism surrounding construction

of approved pipelines, due to shifts in regulation

and legal appeals creating lengthy delays and

additional uncertainty.

ENERGY SECTOR

$ Millions

Alberta Annual Energy Investment Spending

Source: Conference Board of CanadaConference Board of Canada Forecast

U.S. Energy Infromation AdministrationForecast

Nominal Investment Spending energy AlbertaWTI Oil Price

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000 120

100

80

60

40

20

‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

There have been changes in the lending market

designed to improve the long-term financial

stability of the housing market over the past

several years. The impact of the changes is often

dependent on the current market conditions and

the extent of the changes.

In October 2017, the Office of the Superintendent

of Financial Institutions extended the stress

test applied to only high-ratio loans to all loans.

The stress test requires all buyers to qualify at

the greater of the Bank of Canada’s five-year

benchmark rate or the contracted rate plus 200

basis points (two per cent). Implementation

of this change occurred on Jan. 1, 2018 for all

federally regulated institutions.

The extent of the impact in terms of housing

market conditions, and the effectiveness with

respect to risk reduction, is highly debated.

However, many do agree these changes will

push some out of the marketplace or towards

unregulated lenders.

In addition to the change, many forecasters

anticipate the Bank of Canada will increase rates

by an additional 0.75 per cent in 2018. Steady

increases are expected, but the pace of gains

will ultimately depend on wage growth, inflation,

exchange rates and how the economy responds

to higher interest rates.

Higher lending rates, combined with stricter

qualifications, tend to weigh on demand and

impact price appreciation. These rate hikes are

also coming at a time when our market is coming

out of a recession. The period of recession has

impacted wage growth and caused excess supply

in the housing market, weighing on prices.

However, there is also more supply in the lower

prices ranges and this makes the housing market

more affordable than it was two years ago. In

2017, more than 63 per cent of the housing

supply was priced below $500,000, and 41 per

cent of the detached supply was also below

that price. This is an improvement compared

to several years ago, where the share of supply

under that price range was 52 per cent for all

properties and 36 per cent for detached.

Availability of alternative lenders, supply choice

in the lower price ranges and an improving

economy will help temper the downward demand

impact of the rule changes and higher rates. We

anticipate these adjustments will prolong the

period of recovery in our market and create some

pockets of oversupply during the adjustment

period.

LENDING MARKET & INTEREST RATES

ForecastSource: Bank of Canada,

Royal Bank of Canada Forecast, CREB® adjustment

‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Lending Rates

Overnight Target Prime Business Rate

Qualification Rate

0

1

2

3

4

5

6

7

2%

Minimum Qualification Rate

2%


Following job losses and high unemployment in

2016, 2017 recorded employment gains of over

three per cent and a drop in the unemployment

rate to 7.5 per cent by December. Employment

gains are a requirement to ensure stability and,

eventually, recovery in the Calgary housing

market. With an additional job growth of two per

cent forecasted for 2018, this should continue to

support positive momentum in the housing market.

Gains in full-time jobs have been the main source

of growth in 2017, with nearly 20,000 jobs added

to the Calgary Census Metropolitan Area (CMA).

During the same period, over 4,000 part-time jobs

were lost, as some of the part-time positions were

converted into full-time. The annual gain in full-

time employment was not large enough to offset

the losses in 2016, as there continue to be fewer

full-time positions in 2017 relative to the highs

recorded at the beginning of 2015.

There are some lingering issues that will impact

the dynamics of growth in the housing market.

Chief among these are high unemployment rates

and the specific sectors where we are seeing job

growth. Most of the job growth in 2017 has been

in sectors that have traditionally lower wages, and

the high unemployment rates could continue to

weigh on wage growth in the city.

The unemployment rate has eased from recent

highs, but remains elevated compared to

historical levels across all age groups. Despite

recent adjustments, unemployment levels remain

elevated by historical standards, especially for

individuals aged 55-64.

Job growth did not occur across all sectors in

2017. Figures point towards notable growth being

limited to public administration, accommodation

and food services, healthcare and social

assistance, wholesale trade and transportation

and warehousing. These areas generally tend

to have lower wages than the areas where job

losses still occurred. Job losses mostly occurred

in primary industries1 and utilities, construction,

manufacturing, and technical and professional

services.

1Primary industries include occupation in agriculture, forestry, fishing, hunting, mining, quarrying, oil and gas extraction, etc.

LABOUR MARKET

Number of Jobs Unemployment Rate

Calgary CMA Full & Part Time Employment

Source: Statistics Canada

0%

4%

8%

6%

10%

12%

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

Full-Time Employment Growth

Part-Time Employment Growth (Y/Y)

Unemployment Rate

80,000

2%

‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Forecast

Calgary CMA Employment Growth

-2%

0%

2%

4%

6%

8%

10%

12%

Source: Statistics Canada, Conference Board of Canada Forecast

Employment Growth

‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20

Unemployment Rate


More people were employed in 2017 than in 2014

prior to the recession, but improvement came

mostly from the service side of the economy.

However, there are over 30,000 fewer jobs

today from the primary industries and utilities,

construction, and manufacturing sectors

compared to 2014. These three sectors are

expected to record some employment growth in

2018, but it’s not expected to be enough to cover

the previous job losses.

Despite some shifts within the labour

market, continued job growth and reduced

unemployment should help support the economic

recovery in our city and province. There may

continue to be some lagging effects on wages,

but overall growth will prevent further declines in

our housing market.

Primary & Utilities

Construction

Manufacturing



Wholesale Trade

Retail Trade

Information & Cultural Industries

Finance, Insurance & Real Estate





Other Services


-15,000

-10,000

-5,000

0

5,000

10,000

SourceSource: Seasonally adjusted data,Statistics Canada, Conference Board of Canada Forecast

2015 2016 2017 2018 (F)

Employment Growth by Industry - Calgary CMA

15,000

20,000


Due to net migration gains, Calgary benefited

from strong population growth leading up to the

recession. This helped fuel growth in our housing

market, but recent weakness in the energy sector

and job market slowed Calgary’s population

growth from an annual average of three per cent

during 2012 – 2014 to less than one per cent

average over the past two years.

According to the 2017 civic census, the city’s

population stands at just over 1.2 million. The

pace of growth over the next two years is

expected to improve to one per cent annually, as

net migration levels inch up.

Following the financial crisis, and prior to the

2015 recession, on average, Calgary welcomed

over 20,000 people to the city each year,

supporting the growth in both the new-home and

resale housing markets. However, by 2016 this

trend reversed, as more people left than arrived,

causing net migration to decline by 6,500 people.

While we did not experience a loss in 2017, with

974 migrants coming to the city, net migration

remained well below normal levels.

While the City of Calgary census figures do not

provide details regarding the source of migration,

we can gain insights from provincial migration

figures. In Alberta, net migration eased compared

to previous levels. The slower growth was due to

inter-provincial outmigration, but we continued to

see international migrants come to the province.

POPULATION

‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Alberta Quarterly Net Migration

-5,000

-10,000

0

5,000

10,000

15,000

20,000

30,000

25,000

Source: Statistics Canada

Net Interprovincial Migration

Net International Migration

City of Calgary Net Migration

Source: City of Calgary Civic Census Result 2017,City of Calgary Forecast

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

Forecast

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19


Weaker net migration, and therefore population

growth, has weighed on housing demand and

contributed to the supply build up in the market,

as there have been more new-home starts than

the number of new households formed.

As economic conditions start to improve,

forecasters anticipate net migration levels will

improve as well. The City of Calgary estimates

that net migration will average just over 2,000

people annually over the next few years, with

annual net migration not returning to double

digits until 2022. Despite the slower pace of net

migration, the improvements should help prevent

further contractions in housing demand and

alleviate some of the excess supply currently in

the housing market.

Weak net migration and job growth, combined

with rising rental supply, has kept vacancy rates

elevated in Calgary. Vacancy rates reached a high

of seven per cent in 2016, but have improved

slightly in 2017, reflecting the slow and gradual

improvement in our market.

Employment gains, particularly in the lower-

paying sectors, and international migration

supported some easing of this trend. In 2017,

apartment vacancy rates edged down to 6.3 per

cent, based on the October CMHC rental market

survey.

While rental demand improved in 2017, supply

levels also rose, keeping vacancy rates elevated

compared to historical averages. CMHC indicated

that supply growth occurred for both purpose-

built rental and investor-owned apartment units.

5,218 additional units were added to the supply

in 2017, of which over 3,500 units were investor

owned. Of the nearly 60,000-unit rental universe,

36 per cent of the supply is coming from

investor-owned apartment units.

Elevated vacancy rates have placed downward

pressure on rent levels and landlords offered

several incentives to tenants. The CMHC survey

indicated that using same sample methodology,

apartment rents declined by 7.5 per cent in 2016

and another one per cent in 2017.

Improving economic conditions, in terms of

modest employment gains and net migration, are

expected to support some demand growth for

rental product. More stringent lending conditions,

combined with rising lending rates, could

prolong the time many individuals spend in the

rental market. While supply levels may continue

to face some upward pressure from investor-

owned condominiums, conditions supporting

demand growth are expected to outweigh supply

pressure, causing a gradual easing of the vacancy

rates and generating some stability in 2018 rents.

Forecast

Calgary CMA Total Purpose Built Row and Apartment Vacancy Rate

0%

1%

2%

3%

4%

5%

6%

7%

8%

Source: CMHC, 2017 based on October CMHC survey, CMHC Forecast

‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Calgary CMA Average Change in Apartment Rents

Source: CMHC, 2017 based on October CMHC survey

-10

-5

0

5

10

15

20

‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

HOUSING MARKET ACTIVITY RENTAL


Strong starts activity in 2014 and 2015 (mostly in

the multi-family sector) occurred at a time when

demand was easing due to economic conditions.

This caused many builders to scale back

starts in 2016 in reaction to the new economic

environment.

Starts activity in 2016 was at the lowest level

recorded since the financial crisis, while detached

starts were at their lowest levels since 1988.

Improving economic conditions through 2017

supported some gains in starts, with annual levels

of 4,423 and 7,111 for detached and multi-family

units.

Gains in the detached market were supported

by improved confidence in the market, along

with easing inventories in the resale sector in the

early part of the year. In 2018, detached starts are

expected to remain comparable to 2017 levels,

well below longer-term averages.

Activity in the multi-family sector is expected to

continue to adjust, as demand has not kept pace

with the supply in the market. The rise in new-

home inventories in 2017 was mostly due to gains

in the multi-family sector, which accounts for

nearly 78 per cent of the units in inventory. While

units under construction have eased, oversupply

persists in the higher-density areas, impacting

both ownership and rental prices.

Multi-family starts activity increased by 24

per cent in 2017 over 2016. Further growth is

not expected in 2018 until some of the excess

inventory in the market eases.

The Conference Board of Canada is forecasting

Calgary CMA starts to total 11,475 units in 2018,

a slight decline over last year. Despite the

annual decline, detached starts are expected to

improve, while a pull-back is expected in multi-

family starts. Economic conditions are expected

to improve, easing inventory pressure, but

rebalancing in the multi-family market will take

time, as demand slowly catches up with supply in

the market.

Calgary CMA Under Construction and New Home Inventory

Source: CMHC®

0

500

1,000

1,500

2,000

2,500

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Single-family under constructionMulti-family under construction

Inventory

‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Calgary CMA Housing Starts

Source: CMHC, Conference Board of Canada Forecast

2000

0

4000

6000

8000

‘03‘02‘01 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16

Single Family Starts - Calgary

Multi Family Starts - Calgary

10000

12000

‘17 ‘19‘18‘00

Forecast

HOUSING MARKET ACTIVITY NEW HOME


Following two years of slower activity, 2017

marked a year of transition in the housing market.

Calgary moved from an environment of price

easing to general stability driven by the detached

and attached sectors of the market.

This was consistent with a general economic

climate that started to stabilize after adjusting to

the decline in oil prices. During the transition year,

housing sales growth went from strong gains over

the first half of the year, as consumer confidence

improved due to some pent-up demand returning

to the market, to slower sales growth in the

second half the year, which was more in line with

current economic conditions.

Improved consumer confidence encouraged more

sales activity, but it also started to translate into

rising listings, as many sellers also waited to list

their home until market conditions improved.

The result was citywide prices that remained

comparable to the previous year.

Sales and New Listing Growth Total Residential

Source: CREB®

-40%

-20%

0%

20%

40%

60%

Trended New Listing Growth

Trended Sales Growth

‘95‘94‘93 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

HOUSING MARKET ACTIVITY RESALE

Forecast

Price Forecast Residential

Source: CREB®

$0

$100,000

$200,000

$150,000

$250,000

$300,000

$350,000

-10%

0%

10%

20%

30%

40%

50%

60%

Benchmark Price Growth Annual Price Growth

-20%

70%

$50,000

‘04‘03‘02 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

$400,000

$450,000

$500,000

Benchmark Price Anunual Benchmark Price

16

Improving economic conditions in 2018 are

expected to support modest demand growth.

However, rising interest rates and stricter lending

conditions will have some counterbalancing

effects on that demand. The net effect is no

significant changes to market conditions this year,

as the presence of these opposing forces will

likely prolong the period of recovery. Citywide

sales are expected to reach 18,853 units, similar to

levels achieved last year.

Further gains in higher-density new listings

will balance out with easing new listings in the

detached sector, preventing any significant

changes in the number of new listings coming

onto the market. This should help ease the

upward pressure on inventory levels and support

a slow shift towards more balanced conditions.

Despite expectations for the overall market,

as we move through the year there is likely to

be some bumpiness, as both purchasers and

sellers navigate through impacts of the changes.

During the period of adjustment, we are likely to

experience pockets of the market that are not

balanced, creating divergent price trends.

We anticipate citywide prices will remain

relatively unchanged this year, as sufficient

supply levels – combined with rising rates –

increased costs and slow wage growth are

expected to place limits on price growth. While

price trends are expected to vary by product

type and price range, full price recovery is not

expected to occur in 2018.

Forecast

Forecast Price Comparison

-8%

-4%

0%

4%

6%

8%

10%

12%

Source: CREB®

Detached price growth Apartment price growth Attached price growth

2014 2015 2016 20182017

-6%

-2%

2%

0

1

2

3

‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘17

Months of Supply

Source: CREB®

Trended Detached

Trended Semi-Detached

Trended Apartment

Trended Row

4

5

6

7

8


The detached sector has generally seen fewer

price declines compared to the other segments

of the market throughout the recession.

Demand eased for this product throughout the

recession, but it did not experience the same

supply pressure from competing new-home

construction. This prevented the months of

supply from reaching previous highs, unlike other

sectors of the market.

Detached sales in 2017 totaled 11,831 units, 5.6 per

cent above 2016 figures, but nine per cent below

long-term trends. Sales improved, but most of the

growth occurred in the first half of the year. This

is likely a result of some of the pent-up demand

in the market.

By the third quarter, sales started to ease,

with year-to-date totals at levels more in line

with economic fundamentals. Fourth quarter

sales resumed their growth, due to improved

confidence in the market and many consumers

looking to enter the market prior to the new

mortgage rule changes taking effect.

Supply did not keep pace with the early rise in

demand in 2017. This resulted in stronger price

gains throughout the first portion of the year.

However, as supply levels rose in response to

improving prices and demand, the pendulum

swung the other way. This elevated months of

supply and put downward pressure on prices.

Despite the dynamics throughout the year,

detached benchmark prices averaged $504,867

in 2017, 0.63 per cent higher than last year.

Sales by Price Range

0

1,000

2,000

3,000

4,000

5,000

6,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

<$300,000 $500,000

-$599,999

$400,000-

$499,999

$300,000-

$399,999

$600,000-

$699,999

$700,000-

$999,999$1,000,000+

Detached

Source: CREB®

HOUSING MARKET ACTIVITY DETACHED

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

Moving forward, changes in lending criteria

and higher rates are likely to have more of an

impact on the detached sector. Sales activity

is expected to slow by 1.3 per cent, as demand

eases from some of the move-up buyers, and

some purchasers are pushed into more affordable

sectors of the market. However, more significant

declines are not expected, as the changes should

be mitigated by availability of supply in the lower

price ranges, as well as general improvements in

the overall economic situation.

In 2018, we anticipate seeing further shifts in the

distribution of sales, likely impacting average

and median prices. Prior to November 2017,

sales activity in the detached sector improved

mostly in the upper price ranges. However, as of

November, there appeared to be a shift occurring

towards improved growth in the lower price

ranges of the market. Other factors influencing

the distribution of detached sales to more

affordable product can be related to employment

growth in traditionally lower-paying sectors.

While demand shifts in this sector, new listings

are also expected to ease, as some existing

homeowners will be adjusting their expectations.

This should help ease the upward pressure

on inventories and support more balanced

conditions.

During the transition, pockets of over/under

supply may arise, creating divergent trends

in pricing. We anticipate there will be some

price softness for higher-priced product, while

lower-priced homes may see modest price

improvements.

The overall effect is expected to translate into

no significant changes in citywide detached

benchmark prices. However, shifts in distribution

to more affordable product should cause some

downward pressure on average and median

prices.

Inventory by Price Range

0

200

400

600

800

1,000

1,200

1,400

Source: CREB®

2009 2010 2011 2012 2013 2014 2015 2016 2017

<$300,000 $500,000

-$599,999

$400,000-

$499,999

$300,000-

$399,999

$600,000-

$699,999

$700,000-

$999,999$1,000,000+

Detached


HOUSING MARKET ACTIVITY ATTACHED

The attached segment of the market is comprised

of semi-detached-style properties and row units,

and has seen the largest rise in sales activity in

2017. Attached sales increased by 8.2 per cent

for a total of 4,182 units in 2017. Sales growth was

strong for both the semi-detached and row-style

properties.

Attached housing has been appealing to those

who are looking for a more affordable option

than the detached segment in the community

they may be considering. This market is now

accounting for 22 per cent of all residential sales,

compared to the 20 per cent average over the

last decade.

Semi-detached sales totaled 1,823 units in 2017,

which is a six per cent improvement over the

activity recorded last year. It was also nearly 10

per cent higher than the 10-year average, and the

only segment to see a rise in that metric.

The increased popularity of this type of product

has also caused more development of this style of

home, and new listings also improved. However,

the growth in sales outpaced the growth in new

supply. This limited upward pressure on inventory

levels and caused the market to trend towards

more balanced conditions. Annual benchmark

price appreciation reached four per cent for

a total of $420,600, bringing prices to levels

comparable to pre-recession highs.

Sales growth for row properties was also

exceptionally strong, but prices have not been

as resilient in this sector of the market compared

to the semi-detached product. Row sales in 2017

totaled 2,359 units, a 10 per cent increase over

last year, but still seven per cent below longer-

term averages. Despite the rise in sales, new

listings growth prevented significant reductions

in inventory levels. This caused months of supply

to remain elevated at 4.4 months.

This was an improvement over last year, but this

segment continued to favour the buyer, causing

further downward pressure on prices. Annual row

benchmark prices averaged $299,567 in 2017,

three per cent below last year and nine per cent

below recent highs.

As supply in this segment of the market falls

into more affordable categories, we anticipate

further demand shifts to attached properties in

2018. Improving sales, relative to listings, should

cause further reductions in inventory levels and

generate modest improvements in prices. This

is primarily driven by improvements in semi-

detached prices, while row prices are expected to

start to stabilize this year.

Price Growth Comparison

Source: CREB®

‘03‘02‘01 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16

Semi-detached Price Growth Semi-detached PriceRow Price

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

‘17

Row Price Growth


The impact of the recession was most significantly

felt throughout the apartment condominium

sector. A decline in sales, coupled with rising

inventory in the new-home, resale and rental

markets, resulted in more supply than demand.

Sales activity in 2017 improved by over five per

cent over 2016, but the continuing rise in new

listings resulted in inventory levels averaging 1,602

units, just below average peak levels of 1,669 units

recorded in 2008.

The additional supply had clear implications

for pricing. The annual benchmark price in 2017

totaled $263,475, four per cent below last year and

12 per cent below annual highs recorded in 2014.

Availability of rental product and easing rental

rates put some limits on demand growth.

Purchasers did not have to rush into any decisions

regarding ownership. Easing rents and higher

vacancy levels also prevented some consumers

from purchasing condos as an investment property.

Many new condominiums became available in

the market, increasing supply. Condominium

apartments made up nearly 60 per cent of

new multi-family inventory levels this year. The

additional supply caused many builders to offer

various incentives to entice buyers into new

product over resale.

Rising interest rates and changes in lending

requirements could make this product more

attractive to potential purchasers. However,

competition from new product will prevent more

significant gains in resale market sales.

New construction for multi-family product is

expected to ease in 2018, limiting the upward

pressure on total supply. However, supply levels

in both the resale and new-home market are

expected to remain elevated in 2018. While sales

activity may improve and some of the new listing

pressure may ease, it will take time for inventory

levels to decrease. On this basis, this segment

is expected to continue to remain favourable

for buyers for most of the year, placing further

downward pressure on prices. Overall, apartment

benchmark prices are expected to total $260,832,

another one per cent decline over last year’s prices.

Inventory

Source: CREB®

0

1,000

1,500

2,000

Months of Supply 12 Month Trend

500

Apartment

‘03‘02 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

2,500

Benchmark Price and Growth

Source: CREB®

$0

$100,000

$200,000

$150,000

$250,000

$300,000

$350,000

-30%

-10%

0%

10%

20%

30%

40%

50%

60%

Y/Y % Change Benchmark Price Benchmark Price

-20%

70%

Apartment

80%

$50,000

‘03‘02‘01 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

HOUSING MARKET ACTIVITY APARTMENT


DISTRICT SUMMARY

CityCentre

East

North

North EastNorth West

West

South South East

DISTRICT MAP

Citywide trends have been demonstrating the

slow recovery of the housing market, but activity

can vary significantly within communities and

districts:

• Overall, detached prices recorded modest

growth, but this was not the case across all

districts. Modest price declines occurred

in the North East, North, South and East

districts of the city. Some of this decline is

related to the additional supply coming from

the competing new-home sector.

• The strongest annual growth occurred in the

West and City Centre districts. Despite some

price shifts, all districts, except for the West

district, have prices that remained below

previous highs.

• The West district recorded the largest

decline in inventory levels. This pushed that

segment of the market into more balanced

conditions relative to longer-term averages,

supporting stronger price growth this year.

• The apartment sector saw price declines

across all the districts, as every area faced

more supply then demand. Attached sector

prices eased in all districts except for the

City Centre, which recorded annual price

gains of nearly four per cent.

• Attached prices improved in the City Centre

this year, but, overall, they remained over

three per cent below recent highs.

As our market recovers, we anticipate divergence

between districts will persist. Price growth will

be dependent on supply in the resale market and

competing supply in the new-home sector.

CITY OF CALGARY


2017 SalesSales Growth

New Listings

New Listings Growth

Sales to New Listings Ratio Inventory

Average Months of Supply

Benchmark Price

Year-over-year Benchmark Price Change

Change Form Maximum Annual Price

Share of Total Segment Sales

DETACHED

City Centre 1,290 11.0% 2,248 7.6% 57% 378 3.52 $682,892 2.45% -4.33% 10.90%

North East 1,297 -2.0% 2,489 7.7% 52% 389 3.60 $383,533 -0.89% -2.55% 10.96%

North 1,619 3.1% 2,755 14.1% 59% 411 3.05 $439,350 -0.13% -3.18% 13.68%

North West 1,746 4.7% 2,568 5.5% 68% 310 2.13 $544,725 0.03% -4.93% 14.76%

West 1,325 8.2% 2,128 2.9% 62% 301 2.72 $726,267 4.32% 0.00% 11.20%

South 2,418 10.5% 3,682 8.3% 66% 511 2.53 $476,592 -0.33% -4.94% 20.44%

South East 1,770 3.3% 2,667 0.1% 66% 369 2.50 $449,350 0.44% -3.92% 14.96%

East 369 3.4% 565 7.6% 65% 81 2.63 $354,250 -0.50% -3.33% 3.12%

TOTAL CITY 11,831 5.6% 19,095 6.6% 62% 2,751 2.79 $504,867 0.63% -3.30% 100.00%

APARTMENT

City Centre 1,338 3.2% 3,527 2.5% 38% 794 7.12 $289,650 -3.51% -11.72% 46.64%

North East 101 -6.5% 369 20.6% 27% 86 10.27 $233,592 -4.18% -12.81% 3.52%

North 167 9.9% 425 21.8% 39% 91 6.50 $219,100 -5.60% -16.00% 5.82%

North West 285 12.6% 611 2.3% 47% 128 5.38 $243,492 -3.64% -8.98% 9.93%

West 313 8.3% 704 0.6% 44% 152 5.82 $252,000 -2.44% -10.67% 10.91%

South 356 -6.8% 879 1.2% 40% 198 6.66 $234,608 -5.71% -12.51% 12.41%

South East 237 30.9% 506 3.9% 47% 105 5.31 $247,608 -4.08% -11.91% 8.26%

East 72 14.3% 195 4.3% 37% 48 8.01 $196,525 -6.15% -20.49% 2.51%

TOTAL CITY 2,869 5.3% 7,215 3.9% 39.76% 1,602 6.70 $263,475 -3.97% -11.76% 100.00%

SEMI-DETACHED

City Centre 542 6.7% 1,081 4.4% 50% 196 4.34 $763,400 7.35% -0.12% 29.73%

North East 197 1.5% 369 7.6% 53% 63 3.84 $294,842 -3.73% -6.73% 10.81%

North 192 23.1% 263 8.2% 73% 36 2.27 $320,342 -1.69% -4.75% 10.53%

North West 193 7.2% 317 7.1% 61% 47 2.91 $396,583 8.13% -1.51% 10.59%

West 173 4.2% 295 -2.3% 59% 49 3.43 $517,975 6.14% -0.12% 9.49%

South 267 13.1% 403 8.6% 66% 57 2.54 $329,550 -4.41% -7.60% 14.65%

South East 190 -10.0% 260 -13.9% 73% 39 2.43 $323,858 3.31% -0.97% 10.42%

East 70 1.4% 146 16.8% 48% 29 5.01 $293,625 -1.86% -3.99% 3.84%

TOTAL CITY 1,823 6.0% 3,131 3.8% 58.22% 516 3.40 $420,600 3.98% -0.41% 100.00%

ROW

City Centre 401 8.4% 887 5.6% 45% 168 5.02 $472,533 2.97% -4.82% 17.00%

North East 215 0.5% 545 24.7% 39% 104 5.81 $211,167 -2.73% -10.52% 9.11%

North 334 16.4% 598 6.0% 56% 108 3.87 $261,708 -2.11% -8.62% 14.16%

North West 294 11.4% 537 8.0% 55% 91 3.72 $310,133 -3.27% -10.04% 12.46%

West 301 20.9% 600 2.9% 50% 109 4.36 $347,875 -1.45% -7.68% 12.76%

South 414 8.4% 774 3.2% 53% 141 4.10 $270,250 -2.96% -8.23% 17.55%

South East 329 3.1% 610 -0.5% 54% 115 4.18 $295,517 -1.14% -7.33% 13.95%

East 74 23.3% 143 19.2% 52% 30 4.82 $183,675 -4.71% -17.75% 3.14%

TOTAL CITY 2,359 10.0% 4,689 6.5% 50.31% 866 4.40 $299,567 -2.95% -9.00% 100.00%

TOTAL RESIDENTIAL

City Centre 3,571 7.0% 7,743 4.56% 46% 1,536 5.16 $506,342 0.46% -6.99% 18.91%

North East 1,810 -1.6% 3,772 11.01% 48% 643 4.26 $353,942 -1.09% -3.13% 9.59%

North 2,312 6.8% 4,041 13.16% 57% 646 3.35 $395,400 -0.62% -4.47% 12.24%

North West 2,518 6.5% 4,033 5.47% 62% 576 2.74 $475,792 -0.31% -5.48% 13.34%

West 2,112 9.5% 3,727 2.03% 57% 611 3.47 $559,867 2.75% -2.20% 11.19%

South 3,455 8.4% 5,738 6.46% 60% 906 3.15 $412,050 -1.51% -6.50% 18.30%

South East 2,526 4.2% 4,043 -0.59% 63% 627 2.98 $423,550 -0.08% -4.80% 13.38%

East 585 6.6% 1,049 9.61% 56% 188 3.85 $302,817 -1.36% -4.65% 3.10%

TOTAL CITY 18,882 6.1% 34,130 5.77% 55% 5,734 3.64 $437,808 -0.17% -5.03% 100.00%

*District sales may not match total city sales, as some areas within the city limits are not an official community located within a specific district.

SURROUNDING AREAREGIONAL MAP

Strathmore

Vulcan

Didsbury

Carstairs

Blackie

Okotoks

HighRiver

HeritagePointe

Cayley

BlackDiamond

TurnerValley

Beiseker

Chestermere

Langdon

Irricana

Cochrane

Bragg Creek

RedwoodMeadows

Cremona

Mountain View

RockyView

Foothills

Calgary

Airdrie

Wheatland

Vulcan


The areas surrounding the city of Calgary are

influenced by economic conditions similar to

those in the city. Supply in the new-home markets

in these areas often places a greater weight on

resale pricing and each area has its own unique

dynamics to consider. The smaller size of some of

these markets can result in more variability within

the data. We often focus on the larger centres

within the surrounding area.

The surrounding area makes up 22 per cent of

total regional sales, with most of the activity

occurring in Airdrie, Cochrane and Okotoks.

Overall sales activity in surrounding areas totaled

5,334 units in 2017, a 3.7 per cent improvement

over the previous year. This is five per cent above

long-term averages.

New listings growth exceeded the growth in

sales, causing overall gains in inventory levels and

putting further downward pressure on pricing.

Much like the different districts across Calgary,

not all surrounding areas faced price declines.

For example, Strathmore recorded stronger price

growth than other areas and prices have returned

to levels comparable to recent highs.

As economic conditions improve and affordability

continues to be a factor, many of these areas

should see continued improvement in their local

housing markets.

Price growth will ultimately depend on:

• The supply of product in the resale area.

• The competing new-home market.

• The supply availability within Calgary, along

with other surrounding areas.

Share of Sales 2017

Source: CREB®, 2017

Calgary

Airdrie

Rocky View Region

Foothills Region

Mountain View Region

Wheatland Region

OtherActive Areas78%

6%

6%

5%2% 2%

1%

TYPICAL HOME ATTRIBUTES & PRICE - DETACHED HOMES 2017

Year-to-date Detached Bench-mark Price

Year-over-Year Price Change

Per cent Change from Peak Price

Gross Living Area (Above Ground) Year Built Lot Size

Airdrie 377,458 -0.58% -3.86% 1,390 2002 4,653

Cochrane 420,583 -0.83% -5.09% 1,494 1998 5,520

Chestermere 495,217 0.89% -9.84% 1,871 2003 5,511

Okotoks 429,733 -0.86% -4.41% 1,437 2001 5,037

Strathmore 397,100 8.61% 0.00% 1,252 2000 5,583

City of Calgary 504,867 0.63% -3.30% 1,341 1991 4,908


AIRDRIESales activity in Airdrie totaled 1,329 units in

2017, comparable to last year’s levels. Increased

competition from the new-home sector, along

with more supply in lower price ranges within

Calgary, likely prevented strong sales growth in

Airdrie.

Unlike Calgary, when considering annual sales

activity in Airdrie, 2017 levels remain comparable

to activity over the past five years, with the

exception of 2014’s record-high levels.

In addition to the lifestyle choices that Airdrie

provides, the smaller city generally benefits from

having product that is more affordable compared

to homes within Calgary.

The average benchmark price for a detached

home in Airdrie is $377,458, compared to

$504,867 in Calgary. This is also the case for

both attached and apartment product, where the

difference in the attached and apartment sectors

are over $80,000 and $60,000, respectively.

The average annual benchmark price in Airdrie

totaled $348,958 in 2017, 1.1 per cent below last

year’s levels.

Rising supply in the new-home and resale sectors

likely weighed on prices. The price adjustments

seemed to be more pronounced in the attached

segment of the market, driven by declines in

row pricing. Rising inventories in the new-home

market caused some price adjustments in that

sector, adding downward price pressure to the

resale market.

0

200

400

600

‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Airdrie Sales Activity

Source: CREB®

Detached Row

Apartment10 Year - Average

Semi-Detached

800

1,000

1,200

1,400

1,600

1,800

0

100

200

300

400

500

600

‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Airdrie Inventory

Source: CREB®

Detached Row

Semi-DetachedInventory Trend

Apartment

Total Residential


Months of Supply and Price Changes - Airdrie

Source: CREB®

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

90%

100%

0

1

2

3

4

5

6

Months of supply 12 month trend Y/Y benchmark price change

7

8

9

10

‘08‘07 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘17‘16

70%

80%

Total Residential

Starts activity in the area has been easing, which

should limit some of the upward pressure on

supply in this market. At the same time, Airdrie

should benefit from its relative affordability in

the detached market. This should help push this

market towards more balanced levels, generating

more stability in prices in 2018.

OKOTOKSSales activity in Okotoks remained comparable

to levels achieved last year and below long-term

averages. New listings also remained similar,

keeping months of supply relatively stable. With

no significant changes to the market and months

of supply remaining slightly higher than longer-

term averages for the town, annual benchmark

prices eased slightly over the previous year.

Detached benchmark prices averaged $429,733

in 2017, nearly one per cent lower than last year

and four per cent below recent highs. Starts

activity in Okotoks improved in 2017, causing a

rise in new-home inventories.

The additional supply is likely placing some limits

on resale price recovery in the market. Overall,

improving economic conditions will likely prevent

easing sales, but the impact on prices in Okotoks

will continue to be influenced by any supply

pressures coming from the new-home sector.

Okotoks Benchmark Price and Growth

Source: CREB®

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

-10%

0%

10%

20%

30%

40%

50%

60%

‘08‘07 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘17‘16

Y/Y % change benchmark price Benchmark price

-20%

Detached

COCHRANEThe town of Cochrane recorded a 12 per cent rise

in sales in 2017 for a total of 663 units. This is

above last year’s levels and above average levels

over the past five years. It was the second highest

year on record compared to activity in 2014.

The growth in sales was also accompanied by a

rise in new listings, which reached new record

highs, causing further inventory gains. Strong

sales helped cause some downward pressure

on the months of supply, which went from an

average of 5.8 in 2016 to 5.4 in 2017.

Overall, total residential benchmark prices in

Cochrane averaged $421,633 in 2017, just below

last year’s levels of $424,617.

The decline was mostly due to easing in detached

home prices, as attached home prices improved

slightly over the previous year. Higher starts and

inventory of new product impacted prices in the

resale market, as seen in other areas. Prices for

new product eased, adding competitive pressure

for the resale market and limiting the potential

for price recovery in this market.

0

5

10

15

20

25

‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Cochrane Months of Supply

Source: CREB®Months of Supply 12 Month Tend

Total Residential

Cochrane Benchmark Price and Growth

Source: CREB®

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

-10%

0%

10%

20%

30%

40%

50%

60%

‘08‘07 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘17‘16

Y/Y % change benchmark price Benchmark price

-30%

-20%

Total Residential


NOTES


CREB® is a professional body of more than 5,500 licensed brokers and registered associates, representing 290 member offices. CREB® is dedicated to enhancing the value, integrity and expertise of its REALTOR® members.

We are committed to equipping our members with the right tools, services and education to achieve professional excellence — and, in turn, enabling REALTORS® to offer the best possible service to their clients.

Our REALTORS® are committed to a high standard of professional conduct, ongoing education, and a strict Code of Ethics and standards of business practice. Using the services of a professional REALTOR® can help consumers take full advantage of real estate opportunities, while reducing their risks when buying or selling real estate.

CREB® operates and maintains the Multiple Listing Service (MLS®) System for Calgary and the surrounding area. Through the MLS® System, members and, in turn, their clients have immediate access to the latest information on properties listed for sale. Through the MLS® System, REALTORS® can provide the buying and selling public with the broadest possible market exposure and the most complete and up-to-date market information.

Copyright ©2018 CREB®. All rights reserved. CREB® grants reasonable rights of use of this publication’s content solely for personal, corporate or public policy research, and educational purposes. This permission consists of the right to use the content for general reference purposes in written analyses and in the reporting of results, conclusions and forecasts, including the citation of limited amounts of supporting data extracted from this publication. Reasonable and limited rights of use are also permitted in commercial publications subject to the above criteria, and CREB®’s right to request that such use be discontinued for any reason.

Any use of the publication’s content must include the source of the information, including statistical data, acknowledged as follows: CREB® 2018 Economic Outlook and Regional Housing Market Forecast.

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