Summary

• Calgary’s real estate market continues trending towards recovery as sales and listings showed a strong month-over-month increase in June (62% and 38% respectively) 
• New listings increased by 6.5% year-over-year, while sales dropped by 1.5% 
• Despite the drop in sales in June, it was a dramatic improvement over April and May sales numbers, which were as low as 63% weaker year-over-year 
• Growing housing market inventory continues to exert downward pressure on prices — about 2-4% lower overall year-over year. 
• Prices for detached homes are beginning to stabilize compared to May
  
• External economic factors, including high-unemployment and Covid-induced uncertainty, are preventing a full recovery  — the market is likely to remain cautious over the next few months

The severity of Covid-related economic impacts is yet to be fully realized. The end of March, all of April, and May produced shocking province- and country-wide economic indicators, highlighting the reality that almost no industry would be spared from the wrath of the novel coronavirus. The month of June, however, brought with it some good news vis-a-vis the Calgary real estate market. 

In its most recent monthly report, the Calgary Real Estate Board (CREB) assessed that Calgary’s housing market experienced its second-straight month of significant recovery, following record lows in April when social distancing policies were in full effect. While market conditions remain far from “normal”, growth in the number of listings and home sales over the past two months are signs that buyers and sellers are returning to the market. The data-analytics team at Roomvu conducted a further analysis of CREB data to better understand the real estate market recovery across Calgary.   

Overall, monthly sales surged by 62% month-over-month, with 1,747 properties sold in June compared to 1,079 in May. There was a significant increase in new listings as well: 3,335 in June from 2,421 in May — a jump of 38%. Monthly sales were slightly lower (1.5%) on a year-over-year basis however, suggesting that a full recovery has not yet been achieved. The number of new listings increased by 6% year-over-year overall, which may point towards a further trend of recovery in the months to come. 

Figure 1 shows the trend of monthly sales and listings since the start of 2019. As evidenced by the data, sales and listings in June have caught up to pre-Covid levels. In fact, June 2020 featured the highest monthly increase in the last two years. Although sales in June 2020 did not match those of June ‘19, they were at their highest level with respect to month-over-month increases since June of last year. All indications are that market performance in June 2020 was nothing short of exceptional. 

“Recent price declines, easing mortgage rates and early easing of social restrictions are likely contributing to the better-than-expected sales this month,” commented Ann-Marie Lurie, chief economist at CREB in the June report. 

Figure 1. Total Number of Sales and Listing in Calgary by Month

Detached Homes

Figures 2 and 3 show sales performance of detached homes in Calgary benchmarked against June 2019 and May 2020 data. The overall trend of recovery can be seen at the subarea levels as well. Figure 2 illustrates that the number of sales of detached homes is approaching last year’s benchmark across all subareas. In fact, the North, East and South-East areas of Calgary all experienced significantly higher sales in June 2020 compared to 2019 (although sales in North-West and South Calgary lagged behind their neighbours). Overall, the data indicates sales of detached homes in Calgary were only 0.5% lower than those of June 2019. 

Figure 3 highlights positive growth across all subareas with respect to sales of detached homes compared to May of 2020, retaining the positive momentum that began in May following April’s nadir. 

Figure 4 illustrates the percentage increase in sales of attached homes from May 2020, a better representation of the full-extent of Calgary’s market recovery. Month-over-month percentage increases ranged from 31% in the City Centre to a whopping 108% in North Calgary, with all areas experiencing significant improvements. 

Figure 2. Total Sales of Detached Homes In Calgary by Area – Jun’20 vs Jun’19

Figure 3. Total Sales of Detached Homes In Calgary by Area – Jun’20 vs May’20

Figure 4. MoM Percentage Change in Sales of Detached Home in Calgary by Area – Jun’20 vs May’20

Apartments

In contrast to detached homes, apartment sales lagged in June compared to one-year prior by a significant margin (Figure 5). Notably lower sales of apartments in City Centre, North and West Calgary are the main factors causing this year-over-year performance gap. That said, sales in the remaining areas of Calgary have roughly returned to and, in some cases, surpassed June 2019 levels. Apartment sales in June were 13% lower year-over-year overall.

Compared to May, however, Figures 6 and 7 tell a much more optimistic story. Despite not quite reaching last year’s level, a significant improvement in sales performance was observed in June 2020. All subareas of Calgary reported higher apartment sales in June, with the largest increase occurring in the North-West. City Centre — a prominent area for apartments — also reported an 84% gain in apartment sales month-over-month.

Figure 5. Total New Listings of Apartment In Calgary by Area – Jun’20 vs Jun’19

Figure 6. Total New Listings of Apartment In Calgary by Area – Jun’20 vs May’20

Figure 7. MoM Percentage Change in Sales of Apartment in Calgary by Area – Jun’20 vs May’20

Price

Despite the good news inferred from increases in sales and listings, the same cannot be said about prices. As seen in Figure 1 above, the widening gap between new listings and sales is causing persistent inventory growth. As a result, larger supplies of inventories in the market are generating downward pressure on property prices. 

Figures 12 and 13 compare prices of detached homes and apartments in June 2020 to June 2019. Both figures illustrate that prices fell across nearly all subareas of the City of Calgary, with an average decrease of 1.98% for detached homes and 3.83% for apartments. The drop in prices was spread across most areas, with the exception of detached homes in East Calgary (1.57% increase) and apartments in North Calgary (4.0% increase).

Figure 8. YoY Percentage Change in Benchmark Price of Detached Home in Calgary by Area – Jun’20 vs Jun’19

Figure 9. YoY Percentage Change in Benchmark Price of Apartment in Calgary by Area – Jun’20 vs Jun’19

Conclusion

Thanks to easing social restrictions and consumer confidence in Canada’s response to the Covid-19 pandemic, Calgary’s real estate market is showing serious signs of recovery month-to-month, across almost all market segments and subareas of Calgary. On a year-to-year basis, June’s data show the market is nearing pre-Covid levels. 

Nevertheless, persistent inventory growth is likely to continue for the near future, placing downward pressure on prices. Additionally, the real estate market — despite promising data presenting an optimistic outlook — still contains a significant amount of risk, warned Ann-Marie Lurie: “The market remains far from normal. Challenges, such as double-digit unemployment rates, will continue to weigh on the market for months to come.” 

Given the uncertainty, key market players will have to remain vigilant and monitor whether June’s market rebound is a sign of things to come, or a flash in the pan.