Within the city of Calgary, housing sales totalled 18,694 units in the first half of 2022, with sales in the second quarter nearly matching the record high pace set in the first quarter of the year.
At the same time, new listings struggled to keep pace leaving inventories relatively low and the months of supply relatively tight. This resulted in prices trending up in the second quarter relative to both the previous quarter and year.
Since April, the Bank of Canada has taken an aggressive stance against inflation with their most significant move in July, which saw a one per cent increase. After four consecutive rate increases, the overnight lending rate has jumped to 2.5 per cent and pushed mortgage rates up to their highest levels in over a decade.
The lending rate increases have started to impact home sales and are expected to weigh on sales over the second half of the year, offsetting some of the strong gains reported over the first half of the year.
Supply adjustments in the market have been slow, especially for lower priced products. However, the pullback in demand is expected to help support more balanced conditions.
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Significant slowdowns in the detached and semi-detached market were nearly offset by sales growth in the apartment and row sectors. This left July sales three per cent lower than levels recorded last year. While this is the second month where sales activity has slowed, total residential sales this month are still amongst the strongest levels recorded in our market.
Residential new listings in the city declined compared to what was seen in 2021, but when considering the dynamics between price ranges, we are seeing a different trend play out. Listings for homes priced below $500,000 fell by 18 per cent, while levels rose by 20 per cent for homes priced above $500,000. This has left conditions to remain relatively tight in the lower-end of the market while conditions are shifting toward more balanced levels in the upper-end of the market.
When considering the relationship between the supply and demand, the months of supply has continued to trend up from the exceptionally tight conditions seen earlier in the year. However, with just over two months of supply, the market remains far tighter than anything experienced throughout the recessionary period experienced prior to the pandemic.
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