The real estate market in Calgary and the surrounding region is set to experience significant shifts in 2025. With less pressure from migration, an increase in new home completions, and easing lending rates, the market is expected to move toward a more balanced state. Here's a detailed look at what lies ahead and how these factors could shape the housing landscape in the coming year.
Key Trends Shaping 2025
- Balanced Market Conditions
- With slower international migration, record levels of new construction, and lower interest rates, the housing market is expected to stabilize. The added inventory should ease price pressures, creating a more balanced environment for buyers and sellers alike. While sales volumes are forecasted to remain steady, the types of properties in demand may shift, and price growth is expected to moderate to an annual increase of 3%.
2. Shifts in Market Distribution
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- Higher housing completions and increased availability of rental properties are anticipated to ease rental rates, particularly in the condominium market. On the other hand, demand for detached homes is expected to remain robust, supported by interprovincial migration and improving affordability due to lower lending rates.
3. Increased Supply from New Construction
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- The record-high construction starts of 2024 are poised to add substantial inventory in 2025. This surge in supply is expected to enhance the resale market, providing buyers with more options and reducing the intensity of bidding wars seen in recent years.
Market Segment Highlights
Detached Homes
Demand for detached homes is expected to remain strong, supported by favourable lending rates and a continued interprovincial migration. Although population growth is slowing, it remains robust enough to sustain sales above historical trends. Increased inventory in higher price ranges is expected to moderate price growth, with an overall increase of 3% anticipated citywide.
Condominiums
The condo market is expected to feel the impact of eased rental rates and increased supply from new developments. These factors may create more competitive pricing, especially in downtown areas where several new builds are hitting the market. This could provide opportunities for first-time buyers and investors looking for affordable options.
Semi-Detached and Row Housing
While limited inventory semi-detached sales in 2024, the improved supply in 2025 could drive greater activity in this area of the market. These homes, often appealing to those seeking a balance between space and affordability, may see steady demand as more units become available.
Rental Market Insights
The rental market is also undergoing a transformation. A surge in purpose-built rental units in 2024 has already begun to raise vacancy rates, especially in urban centers. With additional units set to be completed in 2025 and slower migration reducing demand, rental rates are likely to stabilize further, offering renters more options at competitive prices.
Risks and Opportunities
While the overall outlook for 2025 points toward stability, certain economic factors could influence the market:
- Economic Uncertainty: Potential tariffs imposed by our Southern Neighbour - Canada’s largest trading partner - could dampen consumer confidence, impacting housing demand. On the flip side, minimal or no tariffs could foster stronger economic growth, supporting more movement and housing activity.
- Easing Lending Rates: Lower lending rates could spark stronger-than-anticipated sales, potentially slowing the market’s transition to balanced conditions.
- Population Growth: Slower migration from record highs will reduce the pace of population growth, but Calgary is still expected to outpace the provincial average, sustaining a healthy demand for housing.
Looking Ahead to 2025
Calgary’s real estate market remains resilient. Sales levels are forecasted to remain above long-term trends highlighting Calgary’s continued appeal. Buyers can look forward to increased choices, particularly in new homes and rental properties, while sellers may face a more competitive landscape as supply grows.
The year ahead offers exciting opportunities for both buyers and sellers as we see a gradual return to balanced market conditions.
Staying informed and working with a knowledgeable real estate professional will be key to navigating these shifts successfully.
This blog post reflects current forecasts and market conditions as of early 2025. For personalized advice tailored to your real estate needs, don’t hesitate to reach out!
