Further Cooling in May...But Will It Last?

"Canadian Real Estate Was Responsible For Nearly Half of GDP Growth Last Quarter" - Better Dwelling (article can be found by clicking here)

When you read that, what is your first thought? For me, it tells me that says, we maybe have one too many eggs in one basket and no major offsetting industries to mitigate any change in real estate.

And when we start to have months as we had in May, where does our economy go when the market starts to slow down?

I'd love to hear your thoughts!

But I digress, we are here to chat about the current market conditions for Calgary this past month.

Aggregated Absorption Rates - Calgary

If you recall last month, we chatted about that eyesore of a cliff back in April where we normally have some of our highest activity.

This month, I'd like to talk about that little foothill coming right after it and possibly that valley that we can expect as we head into the summer months (just like 2021).

This past month we saw the number of listings available increase by 7%, while sales dropped 10% and our absorption rate declined by 16% to bring us to 57%%

The number of listings coming onto the market is not outpacing sales, maintaining our seller's market but as the cumulative effect of fewer sales continues to occur, while new listings are added at this pace, we will continue to see depreciating absorption rates.

This might be mitigated by a slowing of new listings coming into the market in the summertime as we head into a seasonal low point of activity.

As for pricing, we have remained consistent.

Median Sold Prices Per Segment






Price ($)





M/M Variance





Pricing across all segments remained fairly consistent, with the exception of the attached home segment which has been a drop in pricing month over month of 4%.

Both the detached and attached segments were the first to appreciate when our market saw gains and are now the first to see declines from March.

The townhome and apartment segments have both maintained their value since February of this year and this is in part due to the lower price point, which is still attractive to a number of different types of buyers, especially investors.

Apartment Absorption Rates - Calgary

Apartments have seen an increase in the number of listings by 11%, but sales have declined 2%, as well as our absorption rate, has declined by 11% to 43%.

This segment has been a sharp increase and decrease but is still a very good market for first-time buyers and investors to take advantage of. With lower loan carrying costs and higher rents, it may be a great opportunity to own.

Inventory levels are the biggest drive with all segments of the market, but particularly with apartments due to the volume of availability of homes in this segment. This year we still continue to see lower levels of inventory compared to the same time last year.

So Why The Change?

The biggest change we had seen was done back in March as rates changed. With rate changes, so comes the media frenzy about the dire changes to the real estate market and future forecasting. Feel free to check out my blog about how these announcements do nothing but scare the market by clicking here.

Yes, the rate has changed. But most buyers' ability to purchase a home has not changed. They are still required to abide by the stress test rules (email me if you have questions) to get pre-approved for a mortgage.

The biggest change we are seeing here is the residual effects of the major markets seeing declines. Our frenzy in Calgary occurred with a lot of out-of-town interest from buyers with lots of equity/capital in their homes looking to invest. The cost of them pulling out the equity was at historical lows earlier this year.

But what happens when that equity starts to shrink? Or becomes too costly to pull out? The investing appetite starts to decline, causing a decline in activity in lower-cost markets like Calgary and Edmonton.

HELOCs are usually costing prime + premium to pull out if they are secured and even more of a premium if unsecured. So at what point does using the equity in your home for investment become too costly? Each time the overnight rate increases, these HELOCs become more expensive.

That is what these investors are looking at. Driving our market activity to cool.

And why aren't prices reflecting that change yet here?

Because they are based on inventory levels. The same information used by the investor about dire rate changes also spook sellers that were considering a move that might want to hold out now and see how things settle. Not to mention our inventory levels have been depleted for the better part of a year. To have changes in price, we would need a significant increase in supply or a drastic drop in demand to affect prices.

As we head into the summer months, seasonality will slow our market activity along with higher rates and fewer homes for sale. This will continue to maintain the pricing of our segments as fewer sellers will look to sell their homes and focus on travelling and enjoying the summer without restrictions.

Thank You!

I hope you found this market update helpful. The BOC did increase their rates today, June 1, 2022. If have questions about the rate change and how it will affect you, please do let me know.

If you are also in the market to buy or sell, let's chat. The market is really strong for listings that are highly sought out. We can chat about how I can help you with pricing, marketing, and getting the most return on your investment.

Have a wonderful day ahead.

- Aly

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