Calgary market sets new records in August.

Semi-detached properties grew at about the same rate, 11%, and now sit at an average price of $580,000, which is basically the Detached price from two years ago, which is also kind of a crazy thing to behold within our market.

But that’s not all folks! The Row townhouse market is also making huge gains – up 22% – twice the rate of growth as the free hold segments, to sit at $419,000. I’ve long felt that the Row townhouse segment was really great value here in Calgary and the word is getting out and we’re starting to see that sector catch up to attached pricing. My feeling is that it’s being driven by the activity within the Condo/Apartment segment, which is also posting double digit gains, up 15% from this time last year.

Okay, but here’s a little bit of expert insight for you – we are seeing more new listings across all segments when compared to last year, about 7% or so, with the Apartment condo sector showing a nearly 50% jump
in available properties on the market.

Why, you ask? Well, this is almost definitely the result of new construction units hitting the resale market as early stage pre-construction
investors exit into our current boom, pocketing some cash after renting for a year or two.

Now, speaking about the rental market – housing affordability is one of the hottest topics in Canadian real estate, so I’m going to deliver a little bit of insight into this segment of the market for those that are wondering if they should keep renting or push to get into home ownership.

Now, before I dive in, I should note that the statistics I’m referring to here are from a private company, rentfaster.ca, and they are asking rents, so they aren’t based on actual leases.

But since we also run a property management company here at Redline – check us out at greenleafpm.ca – we look after hundreds of properties around the city and we know that the asking rents are essentially the same as leased rents and most of the trends I’ll discuss next are substantiated by our own experience within the marketplace.

So, if you wanted to rent out a property in Calgary you would be looking at approximately $2,000 for a one bedroom condo, $2,500 for a two bedroom and $3,000 for a 3-bedroom house. If you are into suited properties, main floors were commanding just under $2,300 a month in August, and basements are fetching just over $1,600 per month. All of these rents are up significantly compared to last year, on average about $400 more in 2023 than in 2022.

So, with both rental rates and housing prices going up, should you rent or should you buy if you are planning on moving here? Well, housing affordability is one of the hottest topics of conversation around the country these days. Interest rates have increased, making loans more expensive and prices do not appear to be coming down. So, what exactly would your payments look like if you decided to buy, and how do they stack up against the rents for the same asset class?

So, with respect to interest rates, the Globe & Mail had an article recently where they showed the lowest available interest rates across various products like 3-year fixed or variable, 5-year fixed or variable and so forth. For our study I’m going to go with the 5-year variable option because I feel it’s more likely that rates will be lower five years from now, and I also really hate the payout penalties associated with fixed rate loans. Our rate for the study will be 5.25%, and we will use an amortization length of 30 years.

So, using an ‘average’ Calgary sale price for August of $525,000 we’re going to run two sets of numbers – the first one for a first time home buyer using only 5% down, and a second scenario at 25% down which would be the lowest you could use if you were investing in real estate or if you just wanted to avoid CMHC insurance premiums which are getting pretty hefty as loan prices go up more and more each year.

So, a 5% down payment on $525,000 would be $26,250, and your monthly payment would be just over $2,700.

At 20% down, you’d need $105,000 in cash and your payment would be $2,300. Both of these numbers are very close to the ‘average’ rent rate in Calgary right now, which is $2,368, so we are pretty close, but all of them are indeed quite expensive when compared to a few years ago.

But expensive is a relative term. Calgary’s prices are still way, way cheaper than Vancouver’s or Toronto’s, each more than DOUBLE the average sale price that buyers would pay here in Cowtown, and considerably more than the average rental rates in those two cities. So, by that measure, we have it pretty good here in Calgary.