The aggregate price of a home in Calgary increased 9.9 per cent year-over-year to $572,200 in the third quarter of 2021, according to a report released Friday by Royal LePage Canada.
Broken out by housing type, the median price of a single-family detached home increased 11.3 per cent to $643,700, while the median price of a condominium increased 2.9 per cent to $225,800 during the same period, it said.
“Sales activity remains high while inventory is low because as soon as good listings come on the market, they sell quickly. We haven’t seen a September with sales as strong as this year since 2005,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “Inventory is only modestly outpacing sales and buyers are continuing to push themselves financially to be competitive and make the transaction.”
She said that significantly low inventory in the entry-level market has put upward pressure on middle market home prices.
“During the second quarter, we began to see much stronger demand for larger homes as entry-level home prices appreciated at a faster pace and this trend has continued through the third quarter. However, the first-time buyer market will likely continue to be the most active segment,” said Lyall. “As home prices increase at the lower levels, buyers are realizing that for only a relatively modest amount more, they can shop in a very different home category.”
The report forecasts that the aggregate price of a home in Calgary will increase 8.0 per cent in the fourth quarter of 2021, compared to the same quarter last year. The previous forecast, released in July, 2021, has been revised upward to reflect the current state of the market, said the company.
“We are continuing to see buyers, especially young families, relocate from the GTA. If parents can do their same job or find a new career in Calgary, they will relocate for a better lifestyle. With half of what they would pay in the GTA, they can afford a large family home in a popular neighbourhood,” said Lyall.
The Royal LePage House Price Survey Chart can be found here: rlp.ca/house-prices-Q3-2021
The Royal LePage Forecast Chart can be found here: rlp.ca/market-forecast-Q3-2021
Nationally, the aggregate price of a home in Canada increased 21.4 per cent year-over-year to $749,800 in the third quarter of 2021. Market activity slowed as a result of a chronic lack of inventory, a persisting challenge for housing markets from coast-to-coast, coupled with the seasonal summer slowdown, said the report.
“During the third quarter, the torrid pace of home price appreciation moderated as both demand and inventory waned, a typical summer market trend in a very atypical year. With easing pandemic restrictions, there was finally something to talk about other than real estate, and people began travelling and socializing again,” said Phil Soper, president and CEO of Royal LePage. “In addition, a year of relentless competition for too few properties drove some would-be purchasers to the sidelines as buyer fatigue set in. Yet their fundamental need or desire for a new home remains and we are seeing pent-up demand grow. We expect another unusually busy winter season building to a brisk 2022 spring market.”
When broken out by housing type, the national median price of a single-family detached home rose 25.2 per cent year-over-year to $790,000, while the median price of a condominium increased 13.0 per cent year-over-year to $533,600, said the report.
“While detached houses in suburban and smaller city communities continue to be the primary driver of Canada’s aggregate house price growth, we are seeing prices leveling in many of these regions and expect future growth to track closer to historical norms,” said Soper. “While the price gap between houses and condominiums widened during the pandemic, that too should reverse itself in the months ahead, as buyers see condo units as good value for money. In addition, the revitalization of our cities, as employees return to offices and the businesses that serve them reopen, is driving renewed interest from investors eager to provide much-needed rental accommodation.”
Royal LePage forecasts the aggregate price of a home in Canada will increase 16.0 per cent to $771,500 in the fourth quarter of 2021, compared to the same quarter last year. This forecast is consistent with the company’s previous update in July, 2021.
“Looking back to the late spring of 2020, the Royal LePage benchmark value of a home was $580,000. The subsequent ‘COVID-catalyst’ which drove legions of Canadians to upgrade their living situations, has created a period of exceptional home price growth with real estate values on track to grow 33 per cent by year end,” said Soper.