Alberta Real Estate Markets Move Toward Balanced Conditions

The province of Alberta has long attracted people in search of a new career, the mountains, or just a change in lifestyle. And for the better part of the last two years, many Ontario and Quebec residents have been seeking affordability and more space in the Alberta real estate market. While the Alberta housing market is busier than usual, it’s still posting average prices well below that in larger provinces like Ontario, Quebec, and British Columbia – a perfect (and affordable) destination for young professionals and first-time homebuyers to settle down.

Alberta Real Estate Stays Strong Despite Recent Slowdown

Across Canada, housing markets have been gradually moderating from the sky-high sales that dominated much of the last year. Driven mainly by the pandemic and its effects on day-to-day living, markets across Canada have been on fire, and most have settled into a red-hot seller’s market.

Alberta real estate is following the same trend; however, demand activity has failed to emulate the sizzling sales figures from 2020 and 2021.

At the end of December 2022, provincial home sales tumbled 32.2 percent year-over-year to 3,296 units, according to the Alberta Real Estate Association (AREA). In some of the top housing markets across the province, Calgary and Edmonton reported a drop of 31 percent and 26 percent, respectively, in home sales. Calgary recorded 1,204 transactions, while Edmonton saw 712 units exchange hands.

Here is a breakdown of sales volumes in all of 2022:

• Alberta: -2 per cent decline to 84,050 units.
• Calgary: +7 per cent to 29,672 units.
• Edmonton: +1 per cent to 17,3030 units.

With homes still selling at a fast pace across the province, it’s important to have an adequate influx of new listings. However, for the province as a whole, this is not the case. While some areas in Alberta, such as Red Deer and Fort McMurray, are seeing an increase in new homes being listed, the province in its entirety zeroed out with new listings. During December 2022, 3,498 new homes were listed for sale, and nearly 15,000 properties were already on the market. Both represented a 17.5 percent and 1.8 percent year-over-year decline, respectively.

Consistently high demand and a moderate number of new listings have yet again caused the average price of residential property in Alberta to move upwards. In fact, by the end of December 2022, Alberta home prices remained strong, with the total residential average price climbing nearly three percent to $429,496. In all of 2022, home prices swelled five percent to $447,454.

Calgary and Edmonton enjoyed a five percent and two percent gain in average prices to $516,865 and $394,057, respectively.

Even though housing prices continue to rise, the inventory of homes in Alberta is low – a trend that is mirrored in markets across Canada. With 1.8 percent less inventory at the end of December 2022 compared to inventory levels a year ago, houses are hard to come by, and plenty of prospective buyers are being shut out of the market.

In particular, Lethbridge and Medicine Hat are experiencing a depletion of inventory. Not only did Lethbridge see a 16 percent dip in new listings in December, but the city saw an overall inventory increase of 25 percent. Medicine Hat was not far behind, with a nine-per-cent decline in overall inventory year-over-year and a 33 percent decline in new listings. Bucking the national trend, neither of these cities is experiencing a sharp decline in home prices, although the average property price in both markets is below the provincial average.

Will Alberta Continue to Shift Back into Balance?

With the Alberta real estate markets continuously in flux, the overall market has remained consistent in the province as a whole. With certain areas seeing an influx of new listings and others seeing a decrease in sales, there are hopes that Alberta will continue to shift toward more-neutral territory.

With conditions beginning to ease up, prices are no longer increasing at the same alarming rate as they were at this time last year. As we progress into 2023, the Alberta housing market may naturally shift directions and slide back into a buyer’s market, as is typical of the cold Albertan winter.

According to the RE/MAX 2023 Canadian Housing Market Outlook, Calgary home prices are expected to rise seven per cent. Edmonton could see a three-per-cent jump in sales prices this year.