Alberta's Housing Markets Experience Winter Chill After Years of Heat
For the first time in at least three years, Calgary and Edmonton, previously known as Canada's hottest housing markets, are displaying signs of a seasonal winter cooldown. This shift marks a notable departure from the relentless growth that characterized these cities' real estate sectors since 2023.
Significant Sales Declines in January
In January, sales in Edmonton plummeted by more than 27 percent compared to the same period a year earlier, while Calgary saw a 15 percent drop. Nationally, home sales also appeared to freeze, declining by 16 percent last month, which represents the second weakest January since the global financial crisis, according to a report from RBC.
The benchmark price for a home in Calgary fell by 4.7 percent in January, with Greater Edmonton's benchmark price decreasing by one percent. These figures highlight a broader trend of moderation in what had been an overheated market.
Market Balancing Out After Chaotic Years
Darlene Reid, board chair with the Realtors Association of Edmonton, commented on the situation, noting that while dips in sales might typically be concerning, the market is finally balancing out. She reflected on the chaotic past few years, where realtors were on call 24-7 due to intense demand, with properties selling within minutes of listing.
This hectic pace forced buyers to make quick decisions with little time for thorough consideration, Reid explained. However, she believes that a more balanced market is beneficial for all parties involved, including buyers, sellers, lenders, and home inspectors, as it reduces pressure and allows for more thoughtful transactions.
Factors Behind the Slowdown
The slowdown in Alberta's housing market is partly attributed to a significant reduction in newcomers to the province, which has impacted demand. Edmonton, for instance, has 1,100 more homes for sale compared to January last year, indicating increased supply.
Ann-Marie Lurie, chief economist at the Calgary Real Estate Board, pointed out that while the overall market is balancing, the apartment and condo segments continue to face pressure. Demand is not completely gone, but it is now being stretched amongst more supply, she said, highlighting the unique challenges in this sector.
Long-Term Trends and Outlook
Spurred by several consecutive years of population growth, year-over-year increases in both prices and sales had become the norm for Calgary and Edmonton's real estate markets. These cities often defied national trends during seasonal winter slowdowns, showcasing remarkable resilience.
As the market adjusts, experts suggest that this cooldown could lead to a healthier, more sustainable environment. Reid emphasized that a balanced market allows sellers to take their time and buyers to make informed decisions, ultimately supporting long-term stability in Alberta's housing sector.
