Introduction

As we approach 2024, the Alberta real estate market continues to be a topic of significant interest and speculation. With dynamic changes in the economic landscape, understanding the potential direction of the housing market in major cities like Calgary and Edmonton becomes crucial for homeowners, investors, and first-time buyers alike. This article aims to provide a comprehensive forecast for Alberta’s real estate market in 2024, drawing on current data and expert analysis to give readers an informed perspective on what to expect.

Current State of the Alberta Real Estate Market

As of late 2023, the Alberta real estate market is exhibiting robust signs of growth and vitality. Here’s an overview of the current market status:

Overall Market Dynamics

• Strong Performance: In October 2023, Alberta’s housing market demonstrated strength, with sales surging over 16% compared to October 2022. This growth spanned across various property types, notably in high-density sectors like row houses, apartments, and semi-detached properties​​.
• Steady Growth: The market has been on an upward trajectory for the past few years, buoyed by steady population growth and a robust economy. This trend has consistently driven the demand for housing in the region​​.
• Surge in Demand: There’s been a significant surge in property demand over the past year, leading to increased competition among buyers and higher property prices​​.

Specific City Insights

• Edmonton: In November 2023, the average home price in Edmonton was $380,827, marking a 3.3% annual increase. Interestingly, there was a 4.0% monthly decrease. For detached homes specifically, the average price increased by 5.4% year-over-year​​.
• Calgary: The Calgary housing market faced a supply shortage, pushing benchmark home prices higher. This situation also nudged consumers towards more affordable, lower-priced housing options, affecting the average home prices in the city​​.

This current snapshot provides a valuable context for our predictions for 2024. Understanding these trends helps in forecasting future market directions and identifying potential opportunities and challenges for various stakeholders, including homebuyers, investors, and real estate professionals.

2024 Housing Market Forecast: Prices and Trends

Calgary’s Housing Market in 2024

Calgary is anticipated to witness a significant price increase in 2024. Key points include:

1. Price Jump: Houses and condos in Calgary are forecasted to experience a notable price rise. Detached, single-family homes could see a 6% increase, reaching over $800,000, while condos might rise by nearly 9.5% to almost $290,000​​.
2. Economic Recovery and Migration: The economic recovery in Alberta, particularly in Calgary, is attracting more people for job opportunities and living. This influx is a significant driver in the housing price increase.
3. Inter-Provincial Migration: A trend of inter-provincial migration is influencing the market, as people sell high-value properties elsewhere and invest in Calgary’s real estate, including investment properties​​.
4. Interest Rates Impact: With the expectation of falling interest rates in 2024, there could be an increase in market participation​​.

Edmonton’s Real Estate Market in 2024

Edmonton’s market outlook for 2024 is mixed, showing both opportunities and risks:

1. Price Stability: Post the price peak in Spring 2022 and a subsequent fall, Edmonton’s house prices have been recovering. However, there’s a trend towards price stabilization, with an expected growth in the range of 1 to 3% annually, aligning with income growth​​.
2. New Construction Prices: There’s a downward trend in new home prices, which contrasts with the rising prices of existing homes. This trend might continue, impacting both market dynamics and buyer decisions​​.
3. Market Correction Risks: Edmonton faces a moderate risk of a significant market correction. This risk is attributed to factors like high interest rates and market volatility​​.
4. Condo Market Adjustments: The pandemic led to record highs in condo prices, but there has been a significant drop since. With more people working from home, there’s an expectation that developers will adapt by offering larger units, potentially impacting the value of smaller condos​​.

Comparative Insights

When comparing Calgary and Edmonton:

• Calgary is poised for a significant increase in home prices, driven by economic recovery, inter-provincial migration, and changing interest rates.
• Edmonton presents a more cautious outlook with moderate price growth, potential for market correction, and an evolving condo market responding to new consumer preferences.

Both cities are responding differently to economic stimuli and consumer trends, offering unique opportunities and challenges for stakeholders in the real estate market.

Mortgage Rates and the Bank of Canada’s Influence on Alberta’s 2024 Real Estate Market

The mortgage landscape and the Bank of Canada’s policies play a pivotal role in shaping the real estate market. Here’s how these factors are predicted to influence Alberta’s real estate, particularly in Calgary and Edmonton, in 2024:

Bank of Canada’s Rate Decisions

• Rate Cuts Expected: The Bank of Canada is not anticipated to increase rates further and is projected to cut rates by 50 to 100 basis points in the second half of 2024. The target for the overnight rate is expected to hold at 5% for the first half of the year before the cuts​​.

Impact on Mortgage Rates

• Decrease in Fixed Mortgage Rates: Fixed mortgage rates are predicted to decrease throughout 2024, aligning with the Bank of Canada’s rate cuts​​.
• Mortgage Stress Test Peak: The mortgage stress test, currently set at the higher of 5.25% or the contract rate plus two percent, is believed to have reached its peak and will likely decrease​​​​.
• Popularity of Variable Rates: With anticipated rate cuts, variable mortgage rates are expected to become a popular choice among borrowers​​.

Real Estate Price Projections

• Modest Price Rise: Real estate prices in Alberta are expected to rise modestly. While declining rates and immigration will support values, a slowing economy might limit the extent of price growth​​.

Edmonton’s Specific Forecast

• Slight Interest Rate Cut: Experts predict a slight interest rate cut in 2024, but its impact on Edmonton’s real estate market, one of Canada’s most affordable, is not expected to be dramatic​​.
• Affordability Concerns: High borrowing costs might continue to sideline some buyers, especially in the more expensive home segments​​.
• Migration Driving Demand: Continued migration to Alberta, both international and inter-provincial, is expected to sustain demand for housing, particularly in Edmonton, which remains more affordable compared to Calgary​​.
• First-Time Buyers and Investors: These groups are likely to continue driving home sales, especially in the affordable housing segment. There is a possibility of the Edmonton market shifting from balanced to a seller’s market during peak sales months​​.
• Predicted Price Increase: Average residential prices in Edmonton are anticipated to increase by about 4% in 2024, although home sales transactions might decrease by approximately 5%​​.
• Overall Favorable Forecast: Edmonton’s market forecast for 2024 is generally favorable, with strong economic growth and population increase contributing to stable property values​​.

The interplay of mortgage rates and central bank policies is integral to understanding the real estate dynamics in Alberta. As we move into 2024, these factors will significantly influence both the Calgary and Edmonton markets, offering distinct opportunities and challenges to various market participants.

The Future for First-Time Homebuyers and Investors in Alberta’s 2024 Real Estate Market

First-Time Homebuyers

The Alberta real estate market in 2024 presents a mixed landscape for first-time homebuyers, influenced by various factors:

1. Calgary’s Market Dynamics: The average benchmark price for Calgary’s housing market in 2024 is projected at $745,000. The market is expected to experience ongoing price growth, with peak demand anticipated in March 2024​​. Despite uncertainties due to local and global factors, positive indicators like population growth and strong demand in affordable housing segments offer optimism​​.
2. Edmonton’s Affordability: In Edmonton, homes priced under $500,000 are expected to remain in high demand, especially among first-time buyers. This segment is likely to continue as a seller’s market due to a shortage of supply​​. First-time buyers are anticipated to drive home sales, particularly in the affordable housing segment, potentially shifting the market dynamics during peak sales months​​.
3. Population Growth and Migration: Alberta, particularly Calgary, is experiencing significant population growth, a critical factor driving housing demand. This trend, along with the Canadian government’s high immigration targets, is expected to continue in 2024, further impacting the housing market​​.

Investors

Investors are looking at a favorable environment in Alberta’s real estate market in 2024:

1. Investor Sentiment and Role: A study found that 53% of residential real estate investors expect business growth in 2024. Local investors are seen as key players in solving housing shortages by revitalizing unlivable homes and reintroducing them to the market​​.
2. Investment Preferences: Investors are currently motivated by profit potential and are eager to diversify their portfolios. They are providing housing options that are more affordable to buyers, with location remaining a critical factor in their decisions​​.
3. Calgary’s Condo Market: The condo market in Calgary is witnessing rapid price growth, attracting both local and out-of-province investors, as well as new immigrants. Calgary offers some of the lowest apartment prices among major Canadian cities, making it an attractive investment option​​.
4. New Construction Prices: Prices for new construction homes in Calgary have seen a sharp uptick, a trend expected to continue into 2024. This is impacting the overall affordability of housing, with high-end multi-family units replacing affordable single-family dwellings​​.
5. Price Appreciation Potential: Economic trends suggest that Calgary’s real estate market will likely see price appreciation until peak demand in March 2024. Potential gains are projected in the range of 5-15% across all real estate market segments​​.

In summary, Alberta’s real estate market in 2024 offers various opportunities and challenges for first-time homebuyers and investors. The dynamics in Calgary and Edmonton differ, with each city presenting unique conditions influenced by economic factors, population growth, and housing demand. For investors, areas such as Calgary’s condo market and new construction homes present promising opportunities. Meanwhile, first-time homebuyers need to navigate a market characterized by high demand in certain segments and the potential for price growth.

Market Risks and Opportunities: What to Expect in 2024

Identifying Potential Market Risks

1. Economic Uncertainties and Oil Price Fluctuations: Alberta’s real estate market, while optimistic for 2023-2024, faces risks from economic uncertainties and fluctuating oil prices, which can impact market stability​​.
2. High Mortgage Rates: In Edmonton, high mortgage rates are contributing to a low supply of homes priced under $500,000, as families are concerned about affordability and opt to stay in their current homes or rent them out instead of selling​​.
3. Market Volatility: Investors are advised to diversify their portfolios, including real estate assets, to mitigate risks associated with market volatility, ensuring a stable and potentially appreciating asset base​​.

Opportunities in the Alberta Real Estate Market

1. Residential Market Growth: The residential real estate market in Alberta is expected to see substantial growth, driven by lower interest rates and an influx of migrants seeking employment in the province’s burgeoning sectors​​.
2. Price Stabilization: A gradual increase in property values is expected across various regions in Alberta, indicating a stable investment environment and mitigating the likelihood of a housing bubble​​.
3. Revival of Commercial Real Estate: Demand for commercial spaces, particularly in urban centers, is likely to surge, leading to enhanced lease rates and lower vacancies​​.
4. Technological Integration: The integration of technology in the real estate sector, like virtual reality tours and AI-driven property management solutions, is reshaping the transaction experience, making it more efficient and user-friendly​​.
5. Sustainability Trend: There is a rising demand for eco-friendly buildings, with developers focusing on green technologies and sustainable design principles​​.
6. Infrastructure Developments: Ongoing infrastructure developments, such as transit expansions and road enhancements, are expected to bolster property values, especially in areas with improved connectivity​​.
7. First-time Buyers and Investors: In Edmonton, first-time buyers and investors are likely to continue driving home sales, especially in the affordable housing segment, potentially shifting the market dynamics during peak sales months of 2024​​.

Expert Advice for Buyers, Sellers, and Investors

• Diversify Investments: Diversify investment portfolios to include real estate assets for risk mitigation​​.
• Embrace Technology and Innovation: Stay competitive by embracing technological innovations and adapting to evolving consumer preferences​​.
• Engage in Strategic Planning: Conduct thorough market analysis and strategic planning to identify emerging trends, assess potential risks, and optimize investment outcomes​​.

Conclusion

Key Takeaways for Alberta’s Real Estate Market in 2024

1. Growth and Stabilization: Expect growth in the residential market, with signs of price stabilization providing a stable investment environment.
2. Technological and Sustainable Advancements: Technological integration and a focus on sustainability will shape the future of real estate transactions and developments.
3. Impact of Infrastructure and Commercial Growth: Infrastructure developments and a revival in the commercial sector will influence property values and market dynamics.
4. Opportunities Amidst Risks: While economic uncertainties and market volatility pose risks, strategic planning and innovation offer opportunities for success in the real estate market.

Final Thoughts and Recommendations

• For Buyers and Sellers: Monitor market trends closely, considering economic factors and technological advancements. Buyers should explore opportunities in both residential and commercial sectors, while sellers can benefit from price stabilization and infrastructure developments.
• For Investors: Focus on diversification, technological adaptation, and strategic planning to navigate the market successfully. Pay attention to emerging trends, such as sustainability and affordable housing demand, to identify lucrative investment opportunities.

The Alberta real estate market in 2024 presents a landscape of growth, opportunities, and challenges. Staying informed and strategic in approach will be key for all stakeholders navigating this dynamic market.

FAQs

Q: What are the projected home prices for Calgary and Edmonton in 2024?

A: The home prices in both Calgary and Edmonton are forecasted to increase in 2024, according to market surveys and forecasts. This indicates a positive trend for the real estate market in these cities.

Q: What factors are contributing to the projected increase in home prices in Calgary and Edmonton?

A: The projected increase in home prices can be attributed to factors such as favorable market conditions, housing starts, and overall property market trends. Additionally, the growing demand and limited supply of homes are also influencing the forecasted price increase.

Q: How are interest rates expected to impact the home prices in Calgary and Edmonton in 2024?

A: Interest rates play a significant role in the housing market, and it is anticipated that the prevailing interest rates will affect the home prices in Calgary and Edmonton in 2024. Changes in interest rates can influence mortgage trends and subsequently impact the overall home prices in these cities.

Q: What are the expected mortgage trends in Calgary and Edmonton for 2024?

A: The mortgage trends in both Calgary and Edmonton are expected to align with the prevailing economic conditions and interest rate movements. Potential homebuyers and property owners should stay updated on the mortgage trends to make informed decisions regarding their real estate investments.

Q: How does the 2024 home price forecast impact the rental market in Calgary and Edmonton?

A: The home price forecast for 2024 can have implications for the rental market, as changes in home prices may influence the demand for rental properties. It is advisable for landlords and tenants to stay informed about the projected home prices to anticipate potential impacts on the rental market.

Q: Where can I find reliable information on the Calgary and Edmonton real estate market forecast for 2024?

A: Reliable information on the real estate market forecast for 2024 in Calgary and Edmonton can be obtained from sources such as the Calgary Real Estate Board, market reports, and reputable industry publications like the Calgary Herald. Additionally, consulting with experienced real estate brokers can provide valuable insights into the forecasted market trends.

Q: What are the expected trends for new construction home prices in Calgary and Edmonton in 2024?

A: The expected trends for new construction home prices in 2024 are indicative of the overall market conditions and demand for newly built properties. Keeping track of the new construction home prices can offer valuable insights for individuals interested in purchasing or investing in real estate in Calgary and Edmonton.

Q: How will the 2023 real estate market performance impact the home prices in Calgary and Edmonton for 2024?

A: The real estate market performance in 2023 can influence the projected home prices for 2024 in Calgary and Edmonton. Analyzing the trends and shifts in the market conditions from the previous year can provide valuable context for understanding the forecasted home prices in the upcoming year.

Q: What is the forecasted aggregate price of a home in Calgary and Edmonton by the end of 2024?

A: The forecasted aggregate price of a home in Calgary and Edmonton by the end of 2024 is expected to reflect the culmination of market dynamics, housing trends, and economic factors. Staying informed about the forecasted aggregate price can help prospective buyers and sellers make informed decisions in the real estate market.

Q: How are the median prices of single-family detached homes expected to change in Calgary and Edmonton for 2024?

A: The median prices of single-family detached homes are anticipated to undergo changes in 2024, aligning with the forecasted market conditions and demand for such properties. Understanding the projected shifts in median prices can provide valuable insights for individuals interested in the single-family home segment of the real estate market.