CREB Q3 2023 report: 2024 to bring more balance and slower price growth

On November 17, 2023, CREB® released its Q3 2023 housing market report for Calgary and the region, with an early look at 2024.

2023 so far

CREB Chief Economist Ann-Marie Lurie said sales followed expectations, with declines early in the year offset by gains in the second half. Persistent supply problems favoured sellers and led to stronger-than-expected price growth.

The 2024 preview

• Higher rates and inflation are expected to slow consumer spending and business investment, and national growth, in 2024.
• Alberta’s economy is expected to outpace national growth thanks to commodity prices and migration.
• More new listings and more housing starts should offer more choice.
• With population gains and stable employment, sales are expected to be stronger.
• As the market moves toward balance, price growth should slow from 2023’s high pace, but prices are still expected to rise.

Risks

CREB notes considerable risk: changes in global growth could affect commodity prices, Alberta’s economy, jobs and migration, and so the path to a balanced market.

What it means: buyers waiting for a 2024 price drop may be disappointed. The more likely change is more choice and less bidding pressure.

The third quarter in numbers

CREB’s monthly releases show how the third quarter played out. Sales set monthly records in July, August and September, with 2,647, 2,729 and 2,441 sales. The total benchmark price moved from $567,700 in July to $570,700 in August and $570,300 in September. Monthly gains became much smaller than in the spring, and September brought the first pause of the year. In October, the benchmark edged up again to $571,600, nearly 10% higher than a year earlier, with one and a half months of supply.

Calgary total benchmark price, July to October 2023

Why supply adjustments will take time

Lurie said that given the strong migration of the past two years, supply adjustments will take time, which supports further price gains. Listings are improving: October’s 2,684 new listings were the highest for that month since 2015. But inventory is still over 40% below normal levels for the month, and CREB expects the move to balance to be gradual.

The economic background for 2024

CREB expects higher interest rates and inflation to weigh on consumer spending and business investment and to slow national growth in 2024. Alberta should do better than the country because of higher commodity prices and migration. The Bank of Canada’s October forecast points the same way nationally, with growth of 0.9% in 2024 and inflation returning to 2% in 2025.

Compared with CREB’s view a year ago

In January 2023, CREB expected the market to stabilize and low supply to prevent significant price declines. Prices did far better than that: the benchmark rose from $520,900 in January to over $570,000 by the summer. For 2024, CREB again expects more balance, but this time with both sales and prices rising.

The full Q3 2023 Calgary and Region Quarterly Update Report is available from CREB.

Where the pressure is greatest

The October figures show where 2024 starts. Detached inventory was the lowest ever for October, with very tight conditions below $700,000 but 4.3 months of supply above $1,000,000. Semi-detached and row inventory were the lowest since October 2005. Condos under $300,000 fell to 38% of apartment inventory, from 53% a year earlier. Any increase in supply next year will matter most at these lower price points.