As we progress into 2025, Calgary's housing market is exhibiting signs of transitioning toward a more balanced state, presenting both opportunities and considerations for buyers and investors. This shift is primarily driven by evolving supply and demand dynamics, influenced by factors such as easing lending rates, increased housing supply, and moderated population growth.
Sustained Demand Amid Easing Lending Rates
The Calgary Real Estate Board (CREB) forecasts that housing demand will remain robust in 2025, with sales projected to exceed 26,000 units—over 20% higher than long-term trends. This sustained demand is supported by past population and employment gains, as well as easing lending rates, which enhance affordability for buyers. However, it's important to note that while migration levels are expected to remain positive, they are anticipated to slow from the record highs experienced in previous years.
Increased Housing Supply and Market Balance
On the supply side, Calgary has witnessed record-breaking construction activity. By the end of 2024, over 22,500 new homes had been built, nearly half of which were apartments. This influx of new housing is contributing to a more balanced market by alleviating some of the supply constraints that have previously driven up prices. As these new units become available, buyers will have more options, which is expected to moderate the pace of price growth.
Moderation of Price Growth
The combination of sustained demand and increased supply is expected to lead to a moderation in price growth. Citywide price growth is forecasted to slow to an annual gain of 3% in 2025, down from a 7% increase in 2024. It's important to recognize that price trends may vary across different market segments. For instance, lower-priced homes may experience stronger price growth due to limited supply and steady demand, while higher-priced homes could see more modest gains amid increased competition from new builds.
Economic Factors and Potential Risks
Alberta's economy is poised for growth in 2025, driven by investments in alternative energy, carbon capture, food manufacturing, and artificial intelligence. However, potential economic risks, such as the imposition of U.S. tariffs, could impact this positive trajectory. Such uncertainties may affect consumer confidence and, consequently, housing market activity. Investors should remain vigilant and consider these potential risks when making decisions.
Implications for Buyers and Investors
For buyers, the anticipated increase in housing supply coupled with easing lending rates presents a favorable environment to enter the market. The moderation in price growth provides an opportunity to purchase properties without the rapid price escalations seen in previous years.
Investors should consider the varied dynamics across different market segments. While the overall market is moving toward balance, specific segments, such as lower-priced homes, may continue to experience strong demand and price appreciation. Conversely, higher-priced properties might face more competition and slower price growth. Strategic investments in areas with sustained demand and limited supply could yield favorable returns.
Conclusion
Calgary's housing market in 2025 is navigating toward a more balanced state, characterized by sustained demand, increased supply, and moderated price growth. While the overall outlook is positive, it's essential for buyers and investors to stay informed about economic developments and market segment variations to make well-informed decisions.