“There are a lot of factors that are still supporting this sales activity and demand growth”

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The Calgary Real Estate Board expects home sales to remain above historic levels in 2022 after a record 2021, but the big issue will be supply.

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Although sales are unlikely to grow at the same level as last year, CREB expects price growth to reach 4% this year after reaching 8% last year.

“We expect sales activity to come out of these record highs but remain relatively strong,” Ann-Marie Lurie, CREB’s chief economist, said at the organization’s annual conference on Tuesday. “There are a lot of factors that are still supporting this sales activity and demand growth.”

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Calgary started the new year with about two months of supply, the lowest since 2006. The shortage is not due to a lack of people looking to sell, with a 34% increase in new homes on the market in 2021 Sales, however, increased by 71%.

There is also a lack of stock in surrounding communities such as Airdrie and Okotoks, which have become attractive destinations for those seeking quieter communities with more affordable real estate.

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Lurie said she expects continued price growth to bring more homes to market, but it will take several months to break even. She noted that they expected that gap to start closing in late 2021, but then saw a massive sell-off in December.

Weak supply could be helped by the record number of new housing starts in 2021, many of which will be completed this year.

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She also said market pressure will continue to grow through economic recovery, improving energy markets, and technological and financial diversification, which should increase migration to Calgary and also improve the market. rental.

Calgary Mayor Jyoti Gondek said the city is focused on helping that recovery, including prioritizing downtown rejuvenation.

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“Although it has been hit hard, we still realize that a strong core is essential to our economy for jobs and to fund the municipal services we rely on every day,” she said.

There are a few factors that will limit growth, however.

The main ones are inflation and interest rates. Interest rates have been low throughout the pandemic, but are expected to be raised by the Bank of Canada as early as Wednesday. Lurie warned that the increase may not happen at the moment and said she had seen forecasts of between 1 and 2% increase.

“It’s something that tends to slow down the demand for housing,” she said. “When you have rate increases, that naturally changes what people can afford and that’s one of the main factors why we don’t expect sales to continue at this record pace.”

She added that this could lead to a busy spring market as people try to buy before rates rise.

Lurie also said the unpredictability of the ongoing pandemic could be a factor.

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Twitter: @JoshAldrich03

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