The housing market in Calgary is one of the most affordable in Canada, according to a recent report from RBC Economics.
RBC Economics released its Canadian Housing Health Check report earlier in the month, weighing factors such as affordability, resale market balance, interest rates, labour market, and new home inventory.
The company’s “housing risk monitoring dashboard” ranks cities with green, yellow, or red lights in a number of categories, based on the amount of risk there is compared to historical norms.
The report found that, among other Canadian cities such as Vancouver, Montreal, and Toronto, Calgary’s real estate rates as low risk, and it was given a green light in much of the criteria.
RBC’s affordability measure has rated Calgary housing in the “safe zone” since the early 2010s, and it has improved even further over the past couple of years. This means that the price of homes is not a challenge for the average homebuyer in Calgary.
Toronto and Vancouver both received a red light for affordability, while Montreal was in between, with a yellow light.
Despite the COVID-19 pandemic, property values stayed on track through government aid, support from financial institutions, and extremely low interest rates.
“The market has recovered solidly since last summer despite significant economic uncertainty in Alberta,” said Robert Hogue, senior economist at RBC.
“Demand-supply conditions are the tightest they’ve been in years, though this primarily reflects the situation for single-family homes, where prices are now rising modestly,” continued Hogue. “A high rental vacancy rate and drop in immigration is keeping the condo segment in a fragile state.”
While Calgary’s housing market remains steady, the rental market and the inventory of multiple-family dwellings were both given a red light.
According to the report, the rental vacancy rate rebounded to 6.6% in October 2020, which was just shy of the highwater mark of 7% in 2016.
The biggest concern is economic uncertainty and job stability in the province, and a lowered immigration rate due to the continued border closure.
“We expect strong immigration to resume once Canada’s border will reopen,” says the report.
The tightening of demand-supply conditions in the Calgary housing market, particularly for single-family homes, means that prices are on the rise again.
While affordability isn’t an issue, potential buyers may want to take advantage of the low risk market as soon as possible.