2018

Calgary Economic
& Housing Outlook
©2018 CREB®. All rights reserved.
The forecasts included in this document are based on information available
as of December 2017.
Prepared by Ann-Marie Lurie, CREB® chief economist.
Edited by Terence Leung and Tyler Diffley. Designed by Sarah Maynes and Haley Steel.

300 Manning Road NE Phone: 403-263-0530 creb.com

Calgary, Alberta Fax: 403-218-3688 crebforecast.com
T2E 8K4, Canada Email: info@creb.com crebnow.com
Forecast Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Regional Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Lending Market and Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Labour Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Housing Market Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Rental market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

New home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 5

Resale market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Detached sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Attached sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Apartment sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

District Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Surrounding Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Airdrie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Okotoks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Cochrane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 3

 FORECAST SUMMARY
THE HOUSING MARKET IS EXPECTED TO
CONTINUE MOVING TOWARDS RECOVERY
IN 2018, BUT CHALLENGES REMAIN.
Housing market conditions are expected to remain
relatively unchanged in 2018, as the impact of
higher lending rates and stricter lending criteria are
offset by modest improvements in the economic
climate. Recent changes may have prolonged
the recovery period in our market, but it is not
expected to completely derail the transition.
The path to recovery is expected to be bumpy,
as the market adjusts to a new normal. We
are entering 2018 with elevated supply levels
and an environment of rising rates paired with
stricter lending criteria. However, the improving
economy generated modest job growth and net
migration last year, with expectations of further
improvements into 2018.
The opposing impacts of the changes in the lending
environment and economic gains are expected
to cause adjustments in demand/supply balances
based on price range and product type, creating
pockets of over/under supply and generating
different paths of price recovery. Overall, it is
expected to generate conditions comparable to
2017 and the dynamics within each sector of the
market will vary.
Minimal changes in sales activity are expected to
be met with easing new listings for some property
types, limiting the upward pressure on supply. This
should help support more balanced conditions,
preventing widespread benchmark price declines.

Calgary Sales and Price Growth Forecast More balanced market conditions will be led by the
attached and detached sectors of the market, while
30,000 15%
the apartment sector will continue to struggle with
25,000 excess inventory in 2018. Prices will likely continue
10%
to face some downward pressure in the apartment
20,000
5%
sector, with stabilization not expected until the

15,000
latter portion of the year.

0%
10,000 The attached sector may benefit from changes
-5% in distribution, as some demand shifts from the
5,000
detached sector to the attached sector of the

0 -10% market, supporting modest price gains of 0.38

‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 per cent. Easing demand in the detached sector is

Detached Apartment Price growth expected to be met with easing listings, supporting
Attached 10 Year - Average Forecast Source: CREB® overall stability in pricing.

FACTORS CONTRIBUTING TO STABILITY IN THE CALGARY HOUSING MARKET:

• Improvements in the economic climate • Easing vacancy rates in the rental market.
countering the impact of changes in lending
• Relative affordability in the market.
criteria.
• Improved confidence in the overall economy.
• Employment growth and reduction in the
unemployment rate.
• Modest gains in migration.

4 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

UPSIDE/DOWNSIDE OUTLOOK RISK:

•S
 tricter lending criteria and rising rates has a •H
 igh office vacancy, drop in rents, housing
greater than expected impact on demand for availability in all price ranges, and the available
housing, causing downward pressure on prices. pool of skilled labour could help attract
business investment to the city.
•A
 ny significant shifts in the energy sector
could affect employment and confidence in the • Changes to NAFTA could cause uncertainty in
market, influencing overall housing activity. the market, impacting economic growth.
• If unemployment levels remain elevated this
could weigh on demand and prevent easing in
supply levels.
• If employment growth, wages and net
migration improve at a faster pace than
expected, stronger than expected demand
growth in 2018 may occur.

FORECAST TABLE 2015 2016 2017(F) 2018 (F) Forecaster

Economic Indicators
Alberta GDP Growth -3.69% -3.83% 6.69% 2.09% Conference Board of Canada
Calgary CMA GDP Growth -3.30% -3.65% 7.12% 2.46% Conference Board of Canada
Calgary CMA Employment Growth 2.04% -1.49% 3.41% 2.13% Conference Board of Canada
City of Calgary Net Migration 24,900 -6,527 974 1,900 City of Calgary
Housing Starts: Single Family Calgary CMA 4,138 3,489 4,423 4,678 Conference Board of Canada
Housing Starts: Multiple Family Calgary CMA 8,895 5,756 7,111 6,798 Conference Board of Canada
Calgary CMA Two-bedroom Average Rent 1,322 1,258 1,247 1,250 CMHC
Calgary CMA Vacancy Rate 5.30% 7.00% 6.30% 6.00% CMHC
Overnight Bank of Canada Target Rate 0.65% 0.50% 0.70% 1.38% Royal Bank of Canada
WTI Price ($USD) $48.67 $43.33 $50.79 $55.33 U.S. Energy Information Administration
Henry Hub Spot Price ($USD) $2.73 $2.61 $3.12 $3.24 U.S. Energy Information Administration

2015 2016 2017 2018 (F) Forecaster

MLS® System resale market
City of Calgary
Sales 18,839 17,796 18,882 18,853 CREB®
Price growth 1.06% -3.73% -0.17% -0.13% CREB®
New listings 33,876 32,269 34,130 34,354 CREB®
City of Calgary detached
Sales 11,517 11,206 11,831 11,680 CREB®
Price growth 1.17% -2.98% 0.63% -0.10% CREB®
City of Calgary attached
Sales 4,098 3,865 4,182 4,276 CREB®
Price growth 1.71% -4.23% -0.13% 0.38% CREB®
City of Calgary apartment
Sales 3,224 2,725 2,869 2,898 CREB®
Price growth 0.09% -5.97% -3.97% -1.00% CREB®
5
 REGIONAL ECONOMY
GDP Growth Comparison Economic growth throughout the province
exceeded expectations in the first half of 2017.
8%
Annual estimates of over four per cent GDP
6% growth in 2017 place Alberta as the fastest
growing economy.
4%

2% This needs to be put into perspective, as the

Alberta economy shrunk by 3.7 and 3.8 per
0%
cent in 2015 and 2016. Growth in 2017 does not
-2% compensate for all losses over those years. Some

-4% may point towards another boom, but this is not

the case, as current economic activity remains
-6%
below pre-recession levels.
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Calgary GDP growth Canada Source: Statistics Canada,

Alberta GDP growth Forecast Conference Board of Canada Forecast.
Most forecasters anticipate provincial economic
growth to ease to just over two per cent in
2018, but most forecasters do not expect a full
recovery from the recession to occur until 2019.
Industry Share by Total GDP - Calgary 2016
However, the province is moving into the phase of

1% 2% 3%
Primary & Utilities slow recovery and this is a welcome change from
2% Construction
the past several years.
Manufacturing
4%
Transportation & Warehousing
5% In Calgary, 2017 also marked the end of the two-
32% Technical & Professional Services

Wholesale Trade
year recession and further gains are expected
Retail Trade in 2018. Despite the two-year growth, overall
16% Information and Cultural Industries economic activity is expected to remain below
Finance, Insurance and Real Estate 2014 output. Growth figures appear strong,
Healthcare & Social Assistance
7% but this is over a lower base level, as Calgary
Educational Services
3% 4% has not experienced two consecutive years of
5% Accommodation & Food Services
4% 5% recession since the ’80s. Overall, fundamentals
7% Arts & Entertainment

Other Services are supporting a modest recovery to span over

Source: Statistics Canada, Public Administration the next two years.
Conference Board of Canada

6 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 GDP Growth by Industry - Calgary

15%

10%

5%

0%

-5%

-10%

-15%

-20%
TOTAL

Source: Statistics Canada,

2015 2016 2017(F) 2018(F) Conference Board of Canada Forecast.

Primary & Utilities Wholesale Trade Educational Services

Construction Retail Trade Accommodation & Food Services

Manufacturing Information & Cultural Industries Arts & Entertainment

Transportation & Warehousing Finance, Insurance & Real Estate Other Services

Technical & Professional Services Healthcare & Social Assistance Public Administration

ECONOMIC GROWTH BY INDUSTRY:

Throughout the recession, 70 per cent of our industries recorded a contraction in

growth. Not all industries have seen their GDP rise to 2014 levels, but most saw some
rebound in economic growth in 2017. Moving into 2018, growth is expected to be
broader based, as most of the sectors are expected to see an increase in activity. The
only sectors expected to see GDP levels remain below 2014 figures include construction,
manufacturing, information and cultural industries, and other services.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 7

 ENERGY SECTOR
The rebound in the oil sector is playing out
as many had expected: slowly. West Texas
Intermediate (WTI) prices in 2017 have improved
from the lows of the past two years, but
struggled to push above the $50 level throughout
most of 2017.
Many petroleum producers adjusted operations
to support a longer time frame of lower oil prices.
This mostly involved cost cutting, focusing on
efficiencies and reviewing their portfolio of
assets. There will likely continue to be pockets of
readjustments, but this restructuring has enabled
companies to be better suited to operate in a
lower-price environment.
Alberta Annual Energy Investment Spending
$ Millions
70,000
As we move into 2018, the expectation is WTI oil
prices will remain bound between $50 and $65
per barrel. OPEC and Russia agreed to extend the
supply reduction this year, however, additional
supply may come from non-OPEC sources,
preventing stronger price growth. While oil prices
are significantly higher than the $30 monthly
lows recorded during the recession, levels are
not high enough to encourage any significant
increase in new investment spending.
Companies are expected to continue to focus on
best returns, placing some limits on investment
growth in Canada. Heightened uncertainty
regarding the regulatory process, combined
with low energy prices, has impacted investment
activity in our energy sector. Estimated energy
investment is less than half of the level recorded
in 2014.
120

60,000 100 Some improvements are expected over the next

50,000
few years, but investment activity will remain
80
well below levels recorded 2011 - 2015, limiting
40,000
60
the growth for energy sector jobs. Slower energy
30,000 sector employment growth will filter through
40
20,000 many aspects of our economy, including the
housing market.
10,000 20

0 Pipeline capacity issues will continue to weigh on

‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19
the market and impact the differentials between
Source: Conference Board of Canada
Nominal Investment Spending energy Alberta
Conference Board of Canada Forecast
the WTI price and the Western Canadian Select
WTI Oil Price Forecast U.S. Energy Infromation Administration
(WCS) price that we receive for our commodity.
Earlier optimism regarding pipeline developments
was overshadowed by cancellations and delays.
There is also skepticism surrounding construction
of approved pipelines, due to shifts in regulation
and legal appeals creating lengthy delays and
additional uncertainty.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

LENDING MARKET &
INTEREST RATES
There have been changes in the lending market Lending Rates
designed to improve the long-term financial
stability of the housing market over the past 7

several years. The impact of the changes is often 6

Minimum Qualification Rate
dependent on the current market conditions and
5
the extent of the changes.
2%
4

In October 2017, the Office of the Superintendent 3

of Financial Institutions extended the stress
2
test applied to only high-ratio loans to all loans. 2%

The stress test requires all buyers to qualify at 1

the greater of the Bank of Canada’s five-year 0

‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18
benchmark rate or the contracted rate plus 200
basis points (two per cent). Implementation
Overnight Target Prime Business Rate
of this change occurred on Jan. 1, 2018 for all Qualification Rate Forecast
Source: Bank of Canada,
Royal Bank of Canada Forecast, CREB® adjustment
federally regulated institutions.

The extent of the impact in terms of housing
market conditions, and the effectiveness with
respect to risk reduction, is highly debated.
However, many do agree these changes will
push some out of the marketplace or towards
unregulated lenders.
In addition to the change, many forecasters
anticipate the Bank of Canada will increase rates
by an additional 0.75 per cent in 2018. Steady
increases are expected, but the pace of gains
will ultimately depend on wage growth, inflation,
exchange rates and how the economy responds
to higher interest rates.
Higher lending rates, combined with stricter
qualifications, tend to weigh on demand and
impact price appreciation. These rate hikes are
also coming at a time when our market is coming
out of a recession. The period of recession has
impacted wage growth and caused excess supply
in the housing market, weighing on prices.
However, there is also more supply in the lower
prices ranges and this makes the housing market
more affordable than it was two years ago. In
2017, more than 63 per cent of the housing
supply was priced below $500,000, and 41 per
cent of the detached supply was also below
that price. This is an improvement compared
to several years ago, where the share of supply
under that price range was 52 per cent for all
properties and 36 per cent for detached.
Availability of alternative lenders, supply choice
in the lower price ranges and an improving
economy will help temper the downward demand
impact of the rule changes and higher rates. We
anticipate these adjustments will prolong the
period of recovery in our market and create some
pockets of oversupply during the adjustment
period.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 9

 LABOUR MARKET
Following job losses and high unemployment in
2016, 2017 recorded employment gains of over
three per cent and a drop in the unemployment
rate to 7.5 per cent by December. Employment
gains are a requirement to ensure stability and,
eventually, recovery in the Calgary housing
market. With an additional job growth of two per
cent forecasted for 2018, this should continue to
support positive momentum in the housing market.
Calgary CMA Full & Part Time Employment
Number of Jobs
80,000
Gains in full-time jobs have been the main source
of growth in 2017, with nearly 20,000 jobs added
to the Calgary Census Metropolitan Area (CMA).
During the same period, over 4,000 part-time jobs
were lost, as some of the part-time positions were
converted into full-time. The annual gain in full-
time employment was not large enough to offset
the losses in 2016, as there continue to be fewer
full-time positions in 2017 relative to the highs
recorded at the beginning of 2015.
Unemployment Rate There are some lingering issues that will impact
12%
the dynamics of growth in the housing market.

60,000 Chief among these are high unemployment rates

10%
and the specific sectors where we are seeing job
40,000
8% growth. Most of the job growth in 2017 has been
20,000 in sectors that have traditionally lower wages, and
6% the high unemployment rates could continue to
0
weigh on wage growth in the city.
4%
-20,000

2% The unemployment rate has eased from recent

-40,000
highs, but remains elevated compared to
-60,000 0% historical levels across all age groups. Despite
‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
recent adjustments, unemployment levels remain
Full-Time Employment Growth Unemployment Rate
Part-Time Employment Growth (Y/Y) elevated by historical standards, especially for
Source: Statistics Canada
individuals aged 55-64.

Calgary CMA Employment Growth

Job growth did not occur across all sectors in

12%
2017. Figures point towards notable growth being
limited to public administration, accommodation
10%
and food services, healthcare and social
8% assistance, wholesale trade and transportation

6%
and warehousing. These areas generally tend
to have lower wages than the areas where job
4%
losses still occurred. Job losses mostly occurred
2% in primary industries1 and utilities, construction,

0% manufacturing, and technical and professional

services.
-2%
‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20

Employment Growth Unemployment Rate

Forecast Source: Statistics Canada, 1
Conference Board of Canada Forecast Primary industries include occupation in agriculture, forestry,
fishing, hunting, mining, quarrying, oil and gas extraction, etc.

10 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 Employment Growth by Industry - Calgary CMA

20,000

15,000

10,000

5,000

-5,000

-10,000

-15,000

2015 2016 2017 2018 (F) SourceSource: Seasonally adjusted data,

Statistics Canada, Conference Board of Canada Forecast

Primary & Utilities Wholesale Trade Educational Services

Construction Retail Trade Accommodation & Food Services

Manufacturing Information & Cultural Industries Arts & Entertainment

Transportation & Warehousing Finance, Insurance & Real Estate Other Services

Technical & Professional Services Healthcare & Social Assistance Public Administration

More people were employed in 2017 than in 2014
prior to the recession, but improvement came
mostly from the service side of the economy.
However, there are over 30,000 fewer jobs
today from the primary industries and utilities,
construction, and manufacturing sectors
compared to 2014. These three sectors are
expected to record some employment growth in
2018, but it’s not expected to be enough to cover
the previous job losses.
Despite some shifts within the labour
market, continued job growth and reduced
unemployment should help support the economic
recovery in our city and province. There may
continue to be some lagging effects on wages,
but overall growth will prevent further declines in
our housing market.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 11

 POPULATION
Due to net migration gains, Calgary benefited
City of Calgary Net Migration
from strong population growth leading up to the
30,000 recession. This helped fuel growth in our housing

25,000 market, but recent weakness in the energy sector

and job market slowed Calgary’s population
20,000
growth from an annual average of three per cent
15,000 during 2012 – 2014 to less than one per cent
10,000 average over the past two years.

5,000
According to the 2017 civic census, the city’s
0
population stands at just over 1.2 million. The
-5,000 pace of growth over the next two years is
expected to improve to one per cent annually, as
-10,000
‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 net migration levels inch up.
Source: City of Calgary Civic Census Result 2017,
Forecast City of Calgary Forecast
Following the financial crisis, and prior to the
2015 recession, on average, Calgary welcomed

Alberta Quarterly Net Migration over 20,000 people to the city each year,
supporting the growth in both the new-home and
30,000 resale housing markets. However, by 2016 this

25,000 trend reversed, as more people left than arrived,

20,000
causing net migration to decline by 6,500 people.
While we did not experience a loss in 2017, with
15,000
974 migrants coming to the city, net migration
10,000
remained well below normal levels.
5,000

0
While the City of Calgary census figures do not
-5,000
provide details regarding the source of migration,
-10,000 we can gain insights from provincial migration
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
figures. In Alberta, net migration eased compared
to previous levels. The slower growth was due to
Net Interprovincial Migration
Net International Migration inter-provincial outmigration, but we continued to
Source: Statistics Canada
see international migrants come to the province.

12 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

Weaker net migration, and therefore population
growth, has weighed on housing demand and
contributed to the supply build up in the market,
as there have been more new-home starts than
the number of new households formed.

As economic conditions start to improve,

forecasters anticipate net migration levels will
improve as well. The City of Calgary estimates
that net migration will average just over 2,000
people annually over the next few years, with
annual net migration not returning to double
digits until 2022. Despite the slower pace of net
migration, the improvements should help prevent
further contractions in housing demand and
alleviate some of the excess supply currently in
the housing market.
 HOUSING MARKET
ACTIVITY RENTAL
Weak net migration and job growth, combined
with rising rental supply, has kept vacancy rates
elevated in Calgary. Vacancy rates reached a high
of seven per cent in 2016, but have improved
slightly in 2017, reflecting the slow and gradual
improvement in our market.
Employment gains, particularly in the lower-
paying sectors, and international migration
supported some easing of this trend. In 2017,
apartment vacancy rates edged down to 6.3 per
cent, based on the October CMHC rental market
survey.

While rental demand improved in 2017, supply

Calgary CMA Total Purpose Built Row and Apartment Vacancy Rate
levels also rose, keeping vacancy rates elevated
compared to historical averages. CMHC indicated
8% that supply growth occurred for both purpose-
7% built rental and investor-owned apartment units.
5,218 additional units were added to the supply
6%
in 2017, of which over 3,500 units were investor
5%
owned. Of the nearly 60,000-unit rental universe,
4% 36 per cent of the supply is coming from
3% investor-owned apartment units.

2%
Elevated vacancy rates have placed downward
1%
pressure on rent levels and landlords offered
0%
several incentives to tenants. The CMHC survey
‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18
indicated that using same sample methodology,
Forecast Source: CMHC, 2017 based on October CMHC survey, CMHC Forecast
apartment rents declined by 7.5 per cent in 2016
and another one per cent in 2017.

Calgary CMA Average Change in Apartment Rents

Improving economic conditions, in terms of
modest employment gains and net migration, are
20
expected to support some demand growth for
15 rental product. More stringent lending conditions,
combined with rising lending rates, could
10
prolong the time many individuals spend in the
rental market. While supply levels may continue
5
to face some upward pressure from investor-
0 owned condominiums, conditions supporting
demand growth are expected to outweigh supply
-5
pressure, causing a gradual easing of the vacancy

-10 rates and generating some stability in 2018 rents.

‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Source: CMHC, 2017 based on October CMHC survey

14 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

HOUSING MARKET
ACTIVITY NEW HOME
Strong starts activity in 2014 and 2015 (mostly in
Calgary CMA Under Construction and New Home Inventory
the multi-family sector) occurred at a time when
18,000 2,500
demand was easing due to economic conditions.
This caused many builders to scale back 16,000
2,000
starts in 2016 in reaction to the new economic 14,000

environment. 12,000
1,500
10,000
Starts activity in 2016 was at the lowest level
8,000
recorded since the financial crisis, while detached 1,000
6,000
starts were at their lowest levels since 1988.
4,000
Improving economic conditions through 2017 500
2,000
supported some gains in starts, with annual levels
of 4,423 and 7,111 for detached and multi-family 0 0
‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
units.
Single-family under construction Inventory
Multi-family under construction Source: CMHC®
Gains in the detached market were supported
by improved confidence in the market, along
with easing inventories in the resale sector in the Calgary CMA Housing Starts
early part of the year. In 2018, detached starts are
12000
expected to remain comparable to 2017 levels,
well below longer-term averages.
10000

Activity in the multi-family sector is expected to 8000

continue to adjust, as demand has not kept pace

6000
with the supply in the market. The rise in new-
home inventories in 2017 was mostly due to gains
4000
in the multi-family sector, which accounts for
nearly 78 per cent of the units in inventory. While 2000
units under construction have eased, oversupply
0
persists in the higher-density areas, impacting
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19
both ownership and rental prices.
Single Family Starts - Calgary
Source: CMHC,
Multi Family Starts - Calgary Forecast Conference Board of Canada Forecast

Multi-family starts activity increased by 24

per cent in 2017 over 2016. Further growth is
not expected in 2018 until some of the excess
inventory in the market eases.
The Conference Board of Canada is forecasting
Calgary CMA starts to total 11,475 units in 2018,
a slight decline over last year. Despite the
annual decline, detached starts are expected to
improve, while a pull-back is expected in multi-
family starts. Economic conditions are expected
to improve, easing inventory pressure, but
rebalancing in the multi-family market will take
time, as demand slowly catches up with supply in
the market.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 15

 HOUSING MARKET
ACTIVITY RESALE
Sales and New Listing Growth Total Residential Following two years of slower activity, 2017
marked a year of transition in the housing market.
60% Calgary moved from an environment of price
easing to general stability driven by the detached
40% and attached sectors of the market.

20% This was consistent with a general economic

climate that started to stabilize after adjusting to
0% the decline in oil prices. During the transition year,
housing sales growth went from strong gains over
-20% the first half of the year, as consumer confidence
improved due to some pent-up demand returning
-40% to the market, to slower sales growth in the
‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
second half the year, which was more in line with
Trended New Listing Growth
Source: CREB®
current economic conditions.
Trended Sales Growth

Improved consumer confidence encouraged more

Price Forecast Residential sales activity, but it also started to translate into

70% $500,000 rising listings, as many sellers also waited to list

$450,000 their home until market conditions improved.

60%
$400,000 The result was citywide prices that remained
50%
$350,000
comparable to the previous year.
40%
$300,000
30%
$250,000
20%
$200,000
10%
$150,000
0%
$100,000
-10% $50,000

-20% $0
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

Benchmark Price Growth Annual Price Growth Forecast

Benchmark Price Anunual Benchmark Price Source: CREB®

16
Improving economic conditions in 2018 are
Months of Supply
expected to support modest demand growth.
However, rising interest rates and stricter lending 8

conditions will have some counterbalancing 7

effects on that demand. The net effect is no 6

significant changes to market conditions this year,
5
as the presence of these opposing forces will
4
likely prolong the period of recovery. Citywide
sales are expected to reach 18,853 units, similar to 3

levels achieved last year. 2

1
Further gains in higher-density new listings
0
will balance out with easing new listings in the
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
detached sector, preventing any significant
Trended Detached Trended Apartment
changes in the number of new listings coming
Trended Semi-Detached Trended Row Source: CREB®
onto the market. This should help ease the
upward pressure on inventory levels and support
a slow shift towards more balanced conditions. Forecast Price Comparison

12%
Despite expectations for the overall market, 10%
as we move through the year there is likely to 8%
be some bumpiness, as both purchasers and 6%
sellers navigate through impacts of the changes. 4%
During the period of adjustment, we are likely to 2%
experience pockets of the market that are not
0%
balanced, creating divergent price trends.
-2%

-4%
We anticipate citywide prices will remain
-6%
relatively unchanged this year, as sufficient
-8%
supply levels – combined with rising rates – 2014 2015 2016 2017 2018

increased costs and slow wage growth are

Detached price growth Apartment price growth Attached price growth
expected to place limits on price growth. While Forecast Source: CREB®

price trends are expected to vary by product

type and price range, full price recovery is not
expected to occur in 2018.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 17

 HOUSING MARKET
ACTIVITY DETACHED
Sales by Price Range Detached

6,000

5,000

4,000

3,000

2,000

1,000

0
$300,000 $400,000 $500,000 $600,000 $700,000
<$300,000 - - - - - $1,000,000+
$399,999 $499,999 $599,999 $699,999 $999,999

2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: CREB®

The detached sector has generally seen fewer
price declines compared to the other segments
of the market throughout the recession.
Demand eased for this product throughout the
recession, but it did not experience the same
supply pressure from competing new-home
construction. This prevented the months of
supply from reaching previous highs, unlike other
sectors of the market.
Detached sales in 2017 totaled 11,831 units, 5.6 per
cent above 2016 figures, but nine per cent below
long-term trends. Sales improved, but most of the
growth occurred in the first half of the year. This
is likely a result of some of the pent-up demand
in the market.
By the third quarter, sales started to ease,
with year-to-date totals at levels more in line
with economic fundamentals. Fourth quarter
sales resumed their growth, due to improved
confidence in the market and many consumers
looking to enter the market prior to the new
mortgage rule changes taking effect.
Supply did not keep pace with the early rise in
demand in 2017. This resulted in stronger price
gains throughout the first portion of the year.
However, as supply levels rose in response to
improving prices and demand, the pendulum
swung the other way. This elevated months of
supply and put downward pressure on prices.
Despite the dynamics throughout the year,
detached benchmark prices averaged $504,867
in 2017, 0.63 per cent higher than last year.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 Inventory by Price Range Detached

1,400

1,200

1,000

800

600

400

200

0
$300,000 $400,000 $500,000 $600,000 $700,000
<$300,000 - - - - - $1,000,000+
$399,999 $499,999 $599,999 $699,999 $999,999

2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: CREB®

Moving forward, changes in lending criteria
and higher rates are likely to have more of an
impact on the detached sector. Sales activity
is expected to slow by 1.3 per cent, as demand
eases from some of the move-up buyers, and
some purchasers are pushed into more affordable
sectors of the market. However, more significant
declines are not expected, as the changes should
be mitigated by availability of supply in the lower
price ranges, as well as general improvements in
the overall economic situation.
In 2018, we anticipate seeing further shifts in the
distribution of sales, likely impacting average
and median prices. Prior to November 2017,
sales activity in the detached sector improved
mostly in the upper price ranges. However, as of
November, there appeared to be a shift occurring
towards improved growth in the lower price
ranges of the market. Other factors influencing
the distribution of detached sales to more
affordable product can be related to employment
growth in traditionally lower-paying sectors.
While demand shifts in this sector, new listings
are also expected to ease, as some existing
homeowners will be adjusting their expectations.
This should help ease the upward pressure
on inventories and support more balanced
conditions.
During the transition, pockets of over/under
supply may arise, creating divergent trends
in pricing. We anticipate there will be some
price softness for higher-priced product, while
lower-priced homes may see modest price
improvements.
The overall effect is expected to translate into
no significant changes in citywide detached
benchmark prices. However, shifts in distribution
to more affordable product should cause some
downward pressure on average and median
prices.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 19

 HOUSING MARKET
ACTIVITY ATTACHED
The increased popularity of this type of product
Price Growth Comparison
has also caused more development of this style of
80% $500,000 home, and new listings also improved. However,
70% $450,000 the growth in sales outpaced the growth in new
60% $400,000 supply. This limited upward pressure on inventory
50% $350,000 levels and caused the market to trend towards
40% $300,000 more balanced conditions. Annual benchmark
30% $250,000 price appreciation reached four per cent for
20% $200,000 a total of $420,600, bringing prices to levels
10% $150,000 comparable to pre-recession highs.
0% $100,000

-10% $50,000 Sales growth for row properties was also

-20%
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
Semi-detached Price Growth Semi-detached Price
Row Price Growth Row Price Source: CREB®
The attached segment of the market is comprised
of semi-detached-style properties and row units,
and has seen the largest rise in sales activity in
2017. Attached sales increased by 8.2 per cent
for a total of 4,182 units in 2017. Sales growth was
strong for both the semi-detached and row-style
properties.
Attached housing has been appealing to those
who are looking for a more affordable option
than the detached segment in the community
they may be considering. This market is now
accounting for 22 per cent of all residential sales,
compared to the 20 per cent average over the
last decade.
Semi-detached sales totaled 1,823 units in 2017,
which is a six per cent improvement over the
activity recorded last year. It was also nearly 10
per cent higher than the 10-year average, and the
only segment to see a rise in that metric.
$0 exceptionally strong, but prices have not been
as resilient in this sector of the market compared
to the semi-detached product. Row sales in 2017
totaled 2,359 units, a 10 per cent increase over
last year, but still seven per cent below longer-
term averages. Despite the rise in sales, new
listings growth prevented significant reductions
in inventory levels. This caused months of supply
to remain elevated at 4.4 months.
This was an improvement over last year, but this
segment continued to favour the buyer, causing
further downward pressure on prices. Annual row
benchmark prices averaged $299,567 in 2017,
three per cent below last year and nine per cent
below recent highs.
As supply in this segment of the market falls
into more affordable categories, we anticipate
further demand shifts to attached properties in
2018. Improving sales, relative to listings, should
cause further reductions in inventory levels and
generate modest improvements in prices. This
is primarily driven by improvements in semi-
detached prices, while row prices are expected to
start to stabilize this year.

20 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

HOUSING MARKET
ACTIVITY APARTMENT
The impact of the recession was most significantly
felt throughout the apartment condominium
sector. A decline in sales, coupled with rising
inventory in the new-home, resale and rental
markets, resulted in more supply than demand.
Sales activity in 2017 improved by over five per
cent over 2016, but the continuing rise in new
listings resulted in inventory levels averaging 1,602
units, just below average peak levels of 1,669 units
recorded in 2008.
activity may improve and some of the new listing
pressure may ease, it will take time for inventory
levels to decrease. On this basis, this segment
is expected to continue to remain favourable
for buyers for most of the year, placing further
downward pressure on prices. Overall, apartment
benchmark prices are expected to total $260,832,
another one per cent decline over last year’s prices.
Inventory Apartment

The additional supply had clear implications 2,500

for pricing. The annual benchmark price in 2017

totaled $263,475, four per cent below last year and 2,000

12 per cent below annual highs recorded in 2014.

1,500

Availability of rental product and easing rental

rates put some limits on demand growth. 1,000

Purchasers did not have to rush into any decisions

regarding ownership. Easing rents and higher 500
vacancy levels also prevented some consumers
from purchasing condos as an investment property. 0
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Many new condominiums became available in

Months of Supply 12 Month Trend Source: CREB®
the market, increasing supply. Condominium
apartments made up nearly 60 per cent of
new multi-family inventory levels this year. The Benchmark Price and Growth Apartment
additional supply caused many builders to offer
80% $350,000
various incentives to entice buyers into new
70%
product over resale. $300,000
60%
50% $250,000
Rising interest rates and changes in lending
40%
requirements could make this product more 30% $200,000

attractive to potential purchasers. However, 20%

$150,000
competition from new product will prevent more 10%
significant gains in resale market sales. 0% $100,000

-10%
$50,000
New construction for multi-family product is -20%

expected to ease in 2018, limiting the upward -30% $0

‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
pressure on total supply. However, supply levels
in both the resale and new-home market are Y/Y % Change Benchmark Price Benchmark Price Source: CREB®

expected to remain elevated in 2018. While sales

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 21

 DISTRICT SUMMARY

CITY OF
Citywide trends have been demonstrating the
slow recovery of the housing market, but activity
DISTRICT MAP
CALGARY can vary significantly within communities and
districts:

• Overall, detached prices recorded modest

growth, but this was not the case across all
districts. Modest price declines occurred
in the North East, North, South and East
districts of the city. Some of this decline is
North related to the additional supply coming from
the competing new-home sector.

• The strongest annual growth occurred in the

North West West and City Centre districts. Despite some
North East price shifts, all districts, except for the West
district, have prices that remained below
previous highs.

• The West district recorded the largest

decline in inventory levels. This pushed that
segment of the market into more balanced
City
West Centre conditions relative to longer-term averages,
supporting stronger price growth this year.
East
• The apartment sector saw price declines
across all the districts, as every area faced
more supply then demand. Attached sector
prices eased in all districts except for the
City Centre, which recorded annual price
gains of nearly four per cent.
South South East • Attached prices improved in the City Centre
this year, but, overall, they remained over
three per cent below recent highs.

As our market recovers, we anticipate divergence

between districts will persist. Price growth will
be dependent on supply in the resale market and
competing supply in the new-home sector.

22 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 Year- Change
Sales to Average over-year Form Share
New New Months Benchmark Maximum of Total
Sales New Listings Listings of Benchmark Price Annual Segment
2017 Sales Growth Listings Growth Ratio Inventory Supply Price Change Price Sales

DETACHED
City Centre 1,290 11.0% 2,248 7.6% 57% 378 3.52 $682,892 2.45% -4.33% 10.90%
North East 1,297 -2.0% 2,489 7.7% 52% 389 3.60 $383,533 -0.89% -2.55% 10.96%
North 1,619 3.1% 2,755 14.1% 59% 411 3.05 $439,350 -0.13% -3.18% 13.68%
North West 1,746 4.7% 2,568 5.5% 68% 310 2.13 $544,725 0.03% -4.93% 14.76%
West 1,325 8.2% 2,128 2.9% 62% 301 2.72 $726,267 4.32% 0.00% 11.20%
South 2,418 10.5% 3,682 8.3% 66% 511 2.53 $476,592 -0.33% -4.94% 20.44%
South East 1,770 3.3% 2,667 0.1% 66% 369 2.50 $449,350 0.44% -3.92% 14.96%
East 369 3.4% 565 7.6% 65% 81 2.63 $354,250 -0.50% -3.33% 3.12%
TOTAL CITY 11,831 5.6% 19,095 6.6% 62% 2,751 2.79 $504,867 0.63% -3.30% 100.00%
APARTMENT
City Centre 1,338 3.2% 3,527 2.5% 38% 794 7.12 $289,650 -3.51% -11.72% 46.64%
North East 101 -6.5% 369 20.6% 27% 86 10.27 $233,592 -4.18% -12.81% 3.52%
North 167 9.9% 425 21.8% 39% 91 6.50 $219,100 -5.60% -16.00% 5.82%
North West 285 12.6% 611 2.3% 47% 128 5.38 $243,492 -3.64% -8.98% 9.93%
West 313 8.3% 704 0.6% 44% 152 5.82 $252,000 -2.44% -10.67% 10.91%
South 356 -6.8% 879 1.2% 40% 198 6.66 $234,608 -5.71% -12.51% 12.41%
South East 237 30.9% 506 3.9% 47% 105 5.31 $247,608 -4.08% -11.91% 8.26%
East 72 14.3% 195 4.3% 37% 48 8.01 $196,525 -6.15% -20.49% 2.51%
TOTAL CITY 2,869 5.3% 7,215 3.9% 39.76% 1,602 6.70 $263,475 -3.97% -11.76% 100.00%
SEMI-DETACHED
City Centre 542 6.7% 1,081 4.4% 50% 196 4.34 $763,400 7.35% -0.12% 29.73%
North East 197 1.5% 369 7.6% 53% 63 3.84 $294,842 -3.73% -6.73% 10.81%
North 192 23.1% 263 8.2% 73% 36 2.27 $320,342 -1.69% -4.75% 10.53%
North West 193 7.2% 317 7.1% 61% 47 2.91 $396,583 8.13% -1.51% 10.59%
West 173 4.2% 295 -2.3% 59% 49 3.43 $517,975 6.14% -0.12% 9.49%
South 267 13.1% 403 8.6% 66% 57 2.54 $329,550 -4.41% -7.60% 14.65%
South East 190 -10.0% 260 -13.9% 73% 39 2.43 $323,858 3.31% -0.97% 10.42%
East 70 1.4% 146 16.8% 48% 29 5.01 $293,625 -1.86% -3.99% 3.84%
TOTAL CITY 1,823 6.0% 3,131 3.8% 58.22% 516 3.40 $420,600 3.98% -0.41% 100.00%
ROW
City Centre 401 8.4% 887 5.6% 45% 168 5.02 $472,533 2.97% -4.82% 17.00%
North East 215 0.5% 545 24.7% 39% 104 5.81 $211,167 -2.73% -10.52% 9.11%
North 334 16.4% 598 6.0% 56% 108 3.87 $261,708 -2.11% -8.62% 14.16%
North West 294 11.4% 537 8.0% 55% 91 3.72 $310,133 -3.27% -10.04% 12.46%
West 301 20.9% 600 2.9% 50% 109 4.36 $347,875 -1.45% -7.68% 12.76%
South 414 8.4% 774 3.2% 53% 141 4.10 $270,250 -2.96% -8.23% 17.55%
South East 329 3.1% 610 -0.5% 54% 115 4.18 $295,517 -1.14% -7.33% 13.95%
East 74 23.3% 143 19.2% 52% 30 4.82 $183,675 -4.71% -17.75% 3.14%
TOTAL CITY 2,359 10.0% 4,689 6.5% 50.31% 866 4.40 $299,567 -2.95% -9.00% 100.00%
TOTAL RESIDENTIAL
City Centre 3,571 7.0% 7,743 4.56% 46% 1,536 5.16 $506,342 0.46% -6.99% 18.91%
North East 1,810 -1.6% 3,772 11.01% 48% 643 4.26 $353,942 -1.09% -3.13% 9.59%
North 2,312 6.8% 4,041 13.16% 57% 646 3.35 $395,400 -0.62% -4.47% 12.24%
North West 2,518 6.5% 4,033 5.47% 62% 576 2.74 $475,792 -0.31% -5.48% 13.34%
West 2,112 9.5% 3,727 2.03% 57% 611 3.47 $559,867 2.75% -2.20% 11.19%
South 3,455 8.4% 5,738 6.46% 60% 906 3.15 $412,050 -1.51% -6.50% 18.30%
South East 2,526 4.2% 4,043 -0.59% 63% 627 2.98 $423,550 -0.08% -4.80% 13.38%
East 585 6.6% 1,049 9.61% 56% 188 3.85 $302,817 -1.36% -4.65% 3.10%
TOTAL CITY 18,882 6.1% 34,130 5.77% 55% 5,734 3.64 $437,808 -0.17% -5.03% 100.00%

*District sales may not match total city sales, as some areas within the city limits are not an official community located within a specific district.
 SURROUNDING AREA
REGIONAL MAP

Mountain View

Didsbury
Cremona
Carstairs

Beiseker
Rocky
View Airdrie
Irricana
Cochrane Wheatland
Calgary
Chestermere
Redwood Strathmore
Meadows
Langdon
Bragg Creek Heritage
Pointe
Black
Diamond Okotoks
Turner Blackie
Valley High
River Vulcan
Foothills
Cayley Vulcan

24 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 TYPICAL HOME Year-to-date Gross
ATTRIBUTES & PRICE - Detached Bench- Year-over-Year Per cent Change Living Area
DETACHED HOMES 2017 mark Price Price Change from Peak Price (Above Ground) Year Built Lot Size

Airdrie 377,458 -0.58% -3.86% 1,390 2002 4,653

Cochrane 420,583 -0.83% -5.09% 1,494 1998 5,520
Chestermere 495,217 0.89% -9.84% 1,871 2003 5,511
Okotoks 429,733 -0.86% -4.41% 1,437 2001 5,037
Strathmore 397,100 8.61% 0.00% 1,252 2000 5,583
City of Calgary 504,867 0.63% -3.30% 1,341 1991 4,908

The areas surrounding the city of Calgary are

Share of Sales 2017
influenced by economic conditions similar to
those in the city. Supply in the new-home markets 1%
2% 2%
in these areas often places a greater weight on
5% Calgary
resale pricing and each area has its own unique
6% Airdrie
dynamics to consider. The smaller size of some of
Rocky View Region
these markets can result in more variability within 6%
the data. We often focus on the larger centres Foothills Region

within the surrounding area. Mountain View Region

Wheatland Region

The surrounding area makes up 22 per cent of 78% OtherActive Areas

total regional sales, with most of the activity

occurring in Airdrie, Cochrane and Okotoks.
Overall sales activity in surrounding areas totaled
5,334 units in 2017, a 3.7 per cent improvement
Source: CREB®, 2017
over the previous year. This is five per cent above
long-term averages.

New listings growth exceeded the growth in
sales, causing overall gains in inventory levels and
putting further downward pressure on pricing.
Much like the different districts across Calgary,
not all surrounding areas faced price declines.
For example, Strathmore recorded stronger price
growth than other areas and prices have returned
to levels comparable to recent highs.
Price growth will ultimately depend on:
• The supply of product in the resale area.
• The competing new-home market.
•T
 he supply availability within Calgary, along
with other surrounding areas.

As economic conditions improve and affordability

continues to be a factor, many of these areas
should see continued improvement in their local
housing markets.

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 25

 AIRDRIE
Airdrie Sales Activity Sales activity in Airdrie totaled 1,329 units in
2017, comparable to last year’s levels. Increased
1,800
competition from the new-home sector, along
1,600
with more supply in lower price ranges within
1,400 Calgary, likely prevented strong sales growth in
1,200 Airdrie.
1,000

800 Unlike Calgary, when considering annual sales

600
activity in Airdrie, 2017 levels remain comparable
to activity over the past five years, with the
400
exception of 2014’s record-high levels.
200

0
In addition to the lifestyle choices that Airdrie
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
provides, the smaller city generally benefits from
Detached Apartment Semi-Detached
Row 10 Year - Average
having product that is more affordable compared
Source: CREB®
to homes within Calgary.

Airdrie Inventory Total Residential The average benchmark price for a detached

600 home in Airdrie is $377,458, compared to

$504,867 in Calgary. This is also the case for
500 both attached and apartment product, where the
difference in the attached and apartment sectors
400
are over $80,000 and $60,000, respectively.

300
The average annual benchmark price in Airdrie
200 totaled $348,958 in 2017, 1.1 per cent below last
year’s levels.
100

0 Rising supply in the new-home and resale sectors

‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 likely weighed on prices. The price adjustments

Detached Semi-Detached Apartment seemed to be more pronounced in the attached

Row Inventory Trend Source: CREB® segment of the market, driven by declines in
row pricing. Rising inventories in the new-home
market caused some price adjustments in that
sector, adding downward price pressure to the
resale market.

26 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

 Months of Supply and Price Changes - Airdrie Total Residential

10 100%

9 90%
80%
8
70%
7
60%
6
50%
5 40%

4 30%
20%
3
10%
2
0%
1
-10%
0 -20%
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Months of supply 12 month trend Y/Y benchmark price change Source: CREB®

Starts activity in the area has been easing, which

should limit some of the upward pressure on
supply in this market. At the same time, Airdrie
should benefit from its relative affordability in
the detached market. This should help push this
market towards more balanced levels, generating
more stability in prices in 2018.
 OKOTOKS
Sales activity in Okotoks remained comparable
Okotoks Benchmark Price and Growth Detached
to levels achieved last year and below long-term
60% $600,000 averages. New listings also remained similar,
50% keeping months of supply relatively stable. With
$500,000
no significant changes to the market and months
40%
$400,000
of supply remaining slightly higher than longer-
30%
term averages for the town, annual benchmark
20% $300,000 prices eased slightly over the previous year.

10%
$200,000
Detached benchmark prices averaged $429,733
0%
$100,000
in 2017, nearly one per cent lower than last year
-10%
and four per cent below recent highs. Starts
-20% $0 activity in Okotoks improved in 2017, causing a
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
rise in new-home inventories.

Y/Y % change benchmark price Benchmark price Source: CREB®

The additional supply is likely placing some limits
on resale price recovery in the market. Overall,
improving economic conditions will likely prevent
easing sales, but the impact on prices in Okotoks
will continue to be influenced by any supply
pressures coming from the new-home sector.
COCHRANE
The town of Cochrane recorded a 12 per cent rise
Cochrane Months of Supply Total Residential
in sales in 2017 for a total of 663 units. This is
above last year’s levels and above average levels 25
over the past five years. It was the second highest
year on record compared to activity in 2014. 20

The growth in sales was also accompanied by a 15

rise in new listings, which reached new record

highs, causing further inventory gains. Strong 10

sales helped cause some downward pressure

on the months of supply, which went from an 5

average of 5.8 in 2016 to 5.4 in 2017.

0
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17
Overall, total residential benchmark prices in
Cochrane averaged $421,633 in 2017, just below Months of Supply 12 Month Tend Source: CREB®
last year’s levels of $424,617.

The decline was mostly due to easing in detached Cochrane Benchmark Price and Growth Total Residential
home prices, as attached home prices improved 60% $600,000
slightly over the previous year. Higher starts and
50%
inventory of new product impacted prices in the $500,000
40%
resale market, as seen in other areas. Prices for
30% $400,000
new product eased, adding competitive pressure
20%
for the resale market and limiting the potential
$300,000
for price recovery in this market. 10%

0% $200,000

-10%
$100,000
-20%

-30% $0
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

Y/Y % change benchmark price Benchmark price Source: CREB®

CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK 29

 NOTES

30 CREB® | 2018 CALGARY ECONOMIC AND HOUSING OUTLOOK

CREB® is a professional body of more than 5,500 licensed brokers and registered associates, representing 290 member offices.
CREB® is dedicated to enhancing the value, integrity and expertise of its REALTOR® members.

We are committed to equipping our members with the right tools, services and education to achieve professional excellence —
and, in turn, enabling REALTORS® to offer the best possible service to their clients.

Our REALTORS® are committed to a high standard of professional conduct, ongoing education, and a strict Code of Ethics and
standards of business practice. Using the services of a professional REALTOR® can help consumers take full advantage of real estate
opportunities, while reducing their risks when buying or selling real estate.

CREB® operates and maintains the Multiple Listing Service (MLS®) System for Calgary and the surrounding area. Through the
MLS® System, members and, in turn, their clients have immediate access to the latest information on properties listed for sale.
Through the MLS® System, REALTORS® can provide the buying and selling public with the broadest possible market exposure and
the most complete and up-to-date market information.

Copyright ©2018 CREB®. All rights reserved. CREB® grants reasonable rights of use of this publication’s content solely for personal,
corporate or public policy research, and educational purposes. This permission consists of the right to use the content for general
reference purposes in written analyses and in the reporting of results, conclusions and forecasts, including the citation of limited
amounts of supporting data extracted from this publication. Reasonable and limited rights of use are also permitted in commercial
publications subject to the above criteria, and CREB®’s right to request that such use be discontinued for any reason.

Any use of the publication’s content must include the source of the information, including statistical data, acknowledged as follows:
CREB® 2018 Economic Outlook and Regional Housing Market Forecast.
300 Manning Road NE Phone: 403-263-0530 creb.com
Calgary, Alberta Fax: 403-218-3688 crebforecast.com
T2E 8K4, Canada Email: info@creb.com crebnow.com