CREB 2024 forecast: another strong year, with sellers in control through spring

On January 23, 2024, CREB® released its 2024 Forecast Calgary and Region Yearly Outlook Report, prepared by Chief Economist Ann-Marie Lurie.

Looking back

“Despite higher rates, 2023 was a year of relatively strong sales thanks to a robust labour market and strong migration,” Lurie said. Limited supply of low-priced homes led to the largest price gains at the low end.

The 2024 outlook

• Another strong year for sales, as buyers who waited for more choice return when rates ease and listings improve.
• Interprovincial migration and a healthy job market should keep supporting demand.
• More housing starts and new listings should bring modest supply gains.
• Conditions should be less tight than in 2023, but sellers’ conditions are expected to persist through the spring, with further price growth.
• Supply growth should come mainly in higher price ranges, slowing price growth there, while lower-priced homes stay tight.

What it means

Buyers looking at entry-level homes should not expect relief this spring. Move-up buyers may find more choice at the top of the market. Sellers of affordable homes remain in a strong position.

Where 2024 starts

The forecast builds on a year in which Calgary had 27,416 sales, inventory averaged 44% below the 10-year average, and average benchmark growth was nearly 6%. Lurie’s point that the biggest gains came in the lowest-priced homes is clear in the year-end figures: row and apartment prices, the most affordable types, rose over 13%, while detached prices rose nearly 8% and semi-detached 7%.

The starting point: average benchmark price growth in Calgary, 2023

Why buyers are expected to return

The report says rising rates in 2023 pushed buyers towards more affordable homes, while some potential sellers held back from listing. Lurie expects buyers who stayed on the sidelines because of limited choice to re-enter as rates ease and listings improve. Interprovincial migration and a healthy labour market should continue to support sales. Statistics Canada reported last fall that Alberta’s net gain of 56,245 people from other provinces in the year to July 1, 2023 was a record for any province.

Why prices are still expected to rise

Supply is still the issue. More housing starts and new listings should bring modest gains, but supply growth takes time. CREB expects conditions to be less tight than in 2023 but still a sellers’ market through the spring, with further price growth for the year. The gains in supply are expected mainly in upper price ranges, which should slow price growth for higher-priced homes. Lower-priced homes are expected to stay tight, with sustained price gains.

Compared with last year’s forecast

A year ago, CREB expected the market to stabilize in 2023, with low supply preventing significant price declines. Prices instead rose to new records as supply fell short. This year’s forecast starts from tighter conditions and assumes rates ease, so the direction is clearer: more sales, more listings and still-rising prices, but at a slower pace than in 2023.

The full 2024 Forecast Calgary and Region Yearly Outlook Report is available from CREB.

The interest rate link

At its last decision of 2023, on December 6, the Bank of Canada held its rate at 5% for the third time in a row and said the economy is no longer in excess demand. Its next decision is on January 24. If rates do start to ease later in 2024, as CREB assumes, the buyers who waited in 2023 could add to demand just as more listings arrive.