1. Home Price Appreciation
Projected Increase: The average home price in Calgary is expected to rise by approximately 4.5% in 2025, driven by growing buyer confidence and anticipated declines in interest rates.
Current Averages: As of December 2024, the average home price was $605,074, marking a 12% year-over-year increase.
2. Population Growth and Housing Demand
Population Increase: Calgary's population is projected to grow by 2.9% in 2025, attracting new residents due to affordable housing and job opportunities.
Demand Impact: This growth is expected to intensify demand for homes, particularly in family-friendly and affordable neighborhoods.
3. Interest Rates and Buyer Affordability
Mortgage Rates: While mortgage rates are expected to drop in 2025, current higher rates have strained buyer budgets, potentially delaying purchases until more favorable conditions emerge.
4. Inventory Levels and Market Balance
Supply Dynamics: Increased housing starts and construction completions are anticipated to alleviate inventory shortages, contributing to a more balanced market.
Luxury Market: The luxury segment may experience higher inventory levels, offering buyers more choices and negotiating power.
5. First-Time Homebuyers' Influence
Market Share: First-time buyers are expected to play a significant role, particularly in properties priced under $700,000 and condos around $350,000, influenced by federal rule changes facilitating easier mortgage qualifications.
6. Economic Growth and Real Estate Confidence
Economic Outlook: Calgary's economy is projected to grow by 3.2% in 2025, with investments in sectors like technology and renewable energy bolstering buyer confidence across all market segments.
Considerations for Buyers and Sellers
For Buyers: Acting early in the year may be advantageous to secure properties before further price increases.
For Sellers: Highlighting property features and neighborhood amenities can attract competitive offers, especially in high-demand areas.
In summary, Calgary's real estate market in 2025 is expected to exhibit moderate price growth, driven by population increases and economic expansion. While interest rates may decline, current higher rates could influence buyer affordability and timing. An increase in inventory levels may lead to a more balanced market, particularly in the luxury segment.
