It will be a seller's market in 2024, leading to further price growth, according to the annual forecast from the Calgary Real Estate Board (CREB).
But CREB's report says the housing market, for the most part, won't be as tight as it was in 2023, as trends in inter-provincial migration, listings and the labour market are anticipated to support sales activity.
"We expect potential buyers who were on the sidelines due to limited supply choices to re-enter the market as lending rates ease and listings improve," said CREB's chief economist, Ann-Marie Lurie, in a statement.
"Supply growth takes time, and seller's market conditions are expected to persist through the spring, driving further price growth in 2024."
The report expects migration to slow "but remain robust enough to sustain relatively strong sales" in the Calgary market.
The board forecasts that economic recession and environmental regulations — namely, investments impacted by energy sector concerns like the emissions cap and a net-zero grid by 2030 — are some potential risks that could affect this year's forecast, along with population growth tightening the housing market.
Here are some of the report's key forecasts for the year ahead:
Calgary residential sales are expected to hit almost 28,000, slightly up from last year's actual sales of 27,416.
Rental demand will likely remain high, with CREB predicting that population growth will continue to affect Calgary's housing market.
The board expects high price ranges will drive supply growth, but the pace of price growth for properties will slow in the coming year.
Meanwhile, conditions are expected to remain tight for lower-priced properties, contributing to continued price gains.
Inter-provincial migration is this year's top risk, and CREB notes if growth doesn't slow, it could be a longer time before housing supply and high price concerns improve.
After record-high levels moderated over the past few years, sales have remained much higher than long-term housing market trends, CREB says.
Throughout 2023, the market saw a decrease in new listings with more intense price growth than expected, which meant receding home sales.
The board's report notes the only portion of the housing market where new listings improved was the upper end, fuelling the increased sales for houses priced at $700,000 and up.
Calgary's market saw a higher benchmark price than Edmonton at nearly $557,000, marking a 5.8 per cent increase, year over year, according to CREB's report.
Also on Tuesday, the Canadian Real Estate Association (CREA) reported the single-family benchmark price of resale homes was just over $779,100 nationwide and nearly $636,000 in Calgary last month.
Using CREA data, Statistics Canada's national housing market figures for December 2023 indicate new home prices increased the most in "relatively more affordable markets" such as Calgary. Meanwhile, new home prices across most of Canada's markets eased, year-over-year, said StatsCan.
As a response to the national market's easing, construction companies are "pouring money into" residential development, according to the Business Council of Alberta's winter 2024 economic update report.
However, the council's report also notes that residential investment remains 17 per cent lower than 2021 levels, and residential-sector labour shortages coupled with high interest rates could pose challenges for future investment.
The Bank of Canada's overnight target interest rate was brought to five per cent and, after taking longer than expected, higher lending rates did reduce inflation in the country to three per cent by year end.
Though the key benchmark rate is expected to shrink to four per cent by the end of the year, interest rates are still expected to remain "considerably higher" than pre-pandemic levels, the report notes.
The Bank of Canada is slated to announce its next rate decision on Wednesday.