Calgary did not hit record-high sales or prices in the third or fourth quarters, but still posted some of the strongest sales relative to the past five years. This was nearly enough to offset the initial losses recorded during the first shutdown caused by the pandemic.

“It is expected some of the momentum recorded at the end of 2020 will continue into 2021, fueled by exceptionally low lending rates and pent-up demand,” said Ann-Marie Lurie, CREB^® Chief Economist.

“While sales are expected to rise by nearly five per cent on an annual basis in 2021, persistent economic challenges are expected to prevent stronger growth in our housing market.”

Reduction in supply relative to sales is the primary reason the Calgary housing market returned to more balanced conditions by the end of 2020. The pullback in new listings relative to sales activity resulted in inventory levels falling to the lowest levels seen in the past several years.

As we move into 2021, we anticipate new listings will start to rise, as COVID-19 likely caused many homeowners to delay listing their homes. We could start to see some supply come back in 2021, as concerns regarding the spread of the virus ease. Persistently high unemployment rates could also weigh on some existing homeowners who may need to sell their homes.

Growth in supply is expected to offset some of the gains in sales, pushing our market to the upper bounds of balanced conditions and slowing price recovery. However, the price gains that occurred at the end of 2020 are not expected to be eroded and 2021 annual prices are forecasted to improve by over one per cent.

“This year has been filled with twists and turns all over the world. The Calgary housing market was no exception,” said Alan Tennant, CREB^® President and CEO.

“However, our local REALTORS^® continued to serve at a high level by connecting homebuyers and sellers through this difficult period in a safe and timely manner.”



HOUSING MARKET DETACHED

Over the past two years, the detached sector has struggled with slower sales and elevated inventory. Lower lending rates and low prices contributed to the rebound in detached sales in the second half of the year. The reduction in new listings contributed to the fall in inventory levels and brought this
segment back to balanced conditions. Activity was especially strong in the lower price ranges, resulting in that segment shifting to sellers’ market conditions. While activity varied significantly based on price range, tighter conditions supported some price growth throughout the second half of the year, offsetting earlier declines and resulting in relatively stable prices on an annual basis.

" The detached sector will be starting 2021 in far
more balanced conditions relative to several
years ago. This will help prevent a shift back into
oversupplied conditions, as supply levels are
expected to rise. "

However, supply gains are expected to slow some of the price recovery that has been occurring. Detached home prices are expected to improve over 2020 levels, but remain below previous highs. It is also expected much of the price gains will be driven by low- to midpriced product, as supply gains in the upper end of the market could outpace sales activity, preventing any price recovery.



HOUSING MARKET SEMI-DETACHED

A significant drop in inventory and stable sales in 2020 pushed the semi-detached sector into the tightest conditions seen since 2014. Entering 2021 with tight market conditions will provide a buffer if supply levels rise as expected in the housing market. Like other segments, low interest rates are expected to drive up sales. Rising supply levels will somewhat offset the gains, but this segment is expected to remain relatively balanced with modest price growth.

" Rising supply levels will somewhat offset the gains,
but this segment is expected to remain relatively balanced
with modest price growth. "



HOUSING MARKET ROW

Row sales activity recorded the strongest growth relative to the other property types in 2020. Some of the annual sales gain was a result of fewer supply restrictions relative to semi-detached or detached properties.

" Some of the annual sales gain was a result of fewer supply restrictions
relative to semi-detached or detached properties."

After the apartment condominium sector, this segment had the biggest struggle with oversupply, but the improvement in sales helped push this segment into balanced conditions by the end of the year. While this helped support some price recovery, it did not come soon enough to offset earlier declines, as the annual benchmark price fell by nearly two per cent. 

Overall, supply levels are expected to rise this year, but the increase might not be as high for row product, as new-home starts for row properties fell by over 20 per cent in 2020. Sales activity will likely continue to rise given the relative affordability of this product type. This should help ease the downward pressure on prices and support some shifts toward price recovery.



HOUSING MARKET APARTMENT

Prior to the shutdowns, there were signs of improvement in this sector. While the shutdowns impacted all sectors, apartment sales did not rebound in the same manner as the rest of the product types.

In fact, the apartment condominium sector was the only property type to record a significant contraction in sales in 2020. However, the adjustment in new listings was not as significant, keeping inventories elevated and ensuring the market continued to favour the buyer throughout 2020.

The resale condominium apartment sector has struggled with too much supply relative to demand for several years, resulting in a price adjustment of 16 per cent since 2014.

" The resale condominium apartment sector has struggled with too much supply relative to demand for several years,
resulting in a price adjustment of 16 per cent since 2014. "

Slower apartment starts in the newhome sector will help slow the supply gains in 2021, but we still expect listings to rise. At the same time, fewer options for lower-priced product in other property types could start to support sales improvements in this sector. Overall, we do expect the level of excess supply will start to ease in this sector, but it will take some time to see this segment move into balanced conditions. Nonetheless, any movements toward more balanced conditions should help slow the amount of price decline in this sector.

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