The Future of Calgary Real Estate will SCARE You. My 2024 Market Prediction.

Summary

The video script discusses the contrasting effects of Calgary's booming real estate market on homeowners and renters. While homeowners benefit from increased property values due to high immigration and job opportunities, renters face rising costs and job insecurity. The speaker analyzes 2023's housing stats, revealing a significant price increase driven by supply and demand. Predictions for 2024 suggest continued high demand, low inventory, and possibly falling interest rates, which could further inflate housing prices. The script advises viewers to prepare financially and make informed decisions based on their individual circumstances.

Takeaways

• 🏙️ The city is experiencing a boom with increased property values due to high migration for affordable homes and jobs.
• 📈 Homeowners have benefited from increased net worth, while renters face higher costs and less job security, creating a 'Tale of Two Cities'.
• 📊 Calgary's real estate board underestimated the average benchmark price for 2023, which ended up being $570,000 instead of the predicted $526,000.
• 🌐 Strong immigration and low housing supply have led to a significant increase in housing prices, despite high interest rates and lower job growth.
• 📉 There was a slight decrease in sales year-over-year, but this was offset by a 30% increase in rent, making purchasing more attractive.
• 💡 Affordability concerns have shifted buyer demand towards more affordable housing options like row housing and apartment-style condos.
• 📉 Persistently low supply levels in 2023, averaging 44% below the 10-year average, heavily favored sellers and affected pricing and availability.
• 🏘️ Calgary is still considered a bargain in the context of the Canadian real estate market, but it's starting to lose its affordability edge.
• 📈 Apartment-style condominiums saw the greatest growth in sales and pricing, increasing by over 133% compared to the previous year.
• 🌐 High immigration is expected to continue into 2024, maintaining the strong demand for housing.
• 💰 The speaker predicts that housing prices will continue to rise in 2024, possibly by more than the Calgary real estate board's prediction of 10%.

Q & A

What has been the impact of increased migration on homeowners and renters in the city?

Homeowners have experienced increased property values and more net worth due to high migration, while renters have faced increased costs, less affordability, and less job security.

Why did the Calgary real estate board's initial prediction for the average benchmark price in 2023 turn out to be incorrect?

The board underestimated the impact of strong immigration and low housing supply, which led to a significant increase in housing prices, finishing the year at $570,000 instead of the predicted $526,000.

What factors have contributed to the increase in housing prices despite higher interest rates and lower job growth?

The strong demand from immigration has outpaced the downward pressures of higher interest rates and lower job growth, resulting in a continued rise in housing prices.

How did the rental market's increase impact the decision to purchase a home in 2023?

The 30% increase in rent made purchasing a home more attractive as it would result in lower monthly costs compared to paying the increased rent.

What was the general trend in sales for the Calgary real estate market in 2023 compared to the previous year?

There was a slight decrease in sales year-over-year, but the market still supported 27,600 transactions, helped by the increased rent which made home ownership more appealing.

Why did the demand for row housing and apartment-style condos increase in 2023?

The high cost of living and affordability concerns led to a shift in demand towards more affordable housing options like row housing and apartment-style condos.

What was the average supply level of homes in 2023 according to the Calgary real estate board?

The supply levels in 2023 were persistently low, averaging 44% below the 10-year average, which heavily favored sellers and affected pricing and availability.

How does Calgary's affordability compare to other major Canadian cities like Vancouver, Toronto, and Victoria?

While Calgary is still more affordable than Vancouver, Toronto, and Victoria, it is starting to lose its edge as it now takes 47.1% of a household's income to service the mortgage debt, up 8% from the previous year.

What was the performance of the apartment-style condominium market segment in 2023, and why was it an outlier?

The apartment-style condominium market had more sales than the previous year and experienced over a 133% impact on pricing, making it an outlier due to its increased demand and relatively more affordable nature.

What are the three nearby markets outside of Calgary that have become more attractive to homebuyers?

The nearby markets of Airdrie, Okotoks, and Cochrane have become more attractive due to their affordability compared to living in Calgary itself.

What are the three key factors that the speaker believes will influence the real estate market in 2024?

The speaker believes that continued high immigration, the lack of inventory to meet demand, and potential decreases in interest rates will be the key factors influencing the real estate market in 2024.

What prediction does the speaker make for the real estate market in 2024, and why?

The speaker predicts that prices will go up, possibly by more than 10%, due to continued high demand from immigration, limited inventory, and potentially lower interest rates, which could inflate asset prices.

What advice does the speaker give to potential homebuyers who are concerned about affordability and timing in the current market?

The speaker advises potential homebuyers to not give up, to take steps to prepare for the future such as saving for a down payment or improving credit ratings, and to make decisions based on their individual financial situations rather than external pressure.

Outlines

00:00

🏙️ Housing Market Dynamics in Calgary

The script discusses the dual impact of population growth and economic factors on the Calgary housing market. It highlights the increase in property values for homeowners due to high migration in search of affordable homes and jobs. However, it also points out the challenges faced by renters with increased living costs and job insecurity. The video aims to analyze the market trends of the past year and predict the direction of the market in 2024. The speaker unpacks housing stats from the Calgary real estate board, noting the significant increase in housing prices due to strong immigration and low housing supply. The script also addresses the discrepancy between the board's initial predictions and the actual average benchmark price at the end of the year.

05:02

📈 Market Analysis and Predictions for 2024

This paragraph delves into the specifics of the Calgary housing market, noting a decrease in sales year-over-year but an increase in prices, particularly due to a 30% rise in rent, making homeownership more attractive. The speaker discusses the shift in demand towards more affordable housing types like row housing and apartment-style condos. A quote from the Calgary real estate board emphasizes the persistently low supply levels, which heavily favored sellers and affected pricing and availability. The paragraph also compares Calgary's housing affordability with other Canadian cities, noting that while Calgary is still relatively affordable, the cost of homeownership has risen. The speaker predicts that the high demand, coupled with potential decreases in interest rates, will likely lead to further increases in housing prices in 2024.

10:03

💼 Navigating the Housing Market with Financial Prudence

The final paragraph offers advice to potential homebuyers and sellers, emphasizing the importance of not succumbing to fear of missing out (FOMO) and making financially sound decisions. The speaker encourages viewers to consider their financial situation and not to rush into buying or selling房产 without proper consideration. They suggest steps that can be taken to prepare for future housing market conditions, such as saving for a down payment, setting up a financial plan, and ensuring good credit standing. The speaker also offers a no-pressure consultation for viewers to discuss their individual situations and make informed decisions about their housing needs.

Keywords

💡Affordability

Affordability refers to the ability of individuals to pay for goods or services, such as housing, without compromising their financial stability. In the video, affordability is a central theme as it discusses how increased housing prices and rental costs affect people's ability to secure homes in the city. The script mentions that high property values have made it less affordable for renters, leading to a 'Tale of Two Cities' scenario where homeowners benefit while renters face challenges.

💡Property Values

Property values denote the monetary worth of real estate. The video script highlights that property values have increased significantly due to high migration rates, which has led to a rise in net worth for homeowners. However, this increase in property values is also linked to the affordability issue, as it contributes to the high cost of living and challenges faced by renters.

💡Migration

Migration refers to the movement of people from one region to another, often in search of better opportunities. The script discusses record migration to Canada and the province where the city is located, which has driven up demand for housing and consequently property values. Migration is a key factor in the city's booming real estate market and the subsequent effects on affordability.

💡Net Worth

Net worth is the value of all assets owned by an individual or entity, minus the liabilities. In the context of the video, homeowners have seen an increase in their net worth due to the rising property values as a result of high migration. This increase in net worth is a positive outcome for homeowners but is juxtaposed with the affordability challenges faced by renters.

💡Supply and Demand

Supply and demand are fundamental economic concepts that describe the relationship between the availability of a product (supply) and the desire to purchase it (demand). The video emphasizes that the strong demand from immigration, coupled with consistently low supply in the housing market, has led to a significant increase in housing prices. This basic economic principle is central to understanding the current real estate situation in the city.

💡Housing Stats Package

A housing stats package is a collection of data and statistics related to the housing market, often provided by real estate boards. In the script, the housing stats package for 2023 from the Calgary real estate board is mentioned as a source of information that confirms the trend of increasing housing prices due to strong immigration and low supply.

💡Interest Rates

Interest rates are the percentage at which interest is paid by borrowers and earned by lenders on debt. The video script discusses how higher interest rates are typically expected to cause housing prices to drop. However, the strong demand from immigration has outpaced these downward pressures, leading to an increase in housing prices despite the interest rates.

💡Job Security

Job security refers to the likelihood that an individual will continue to have a job and not be subject to layoffs or unemployment. The script mentions that renters have experienced increased costs, less affordability, and less job security, which contrasts with the situation of homeowners who have benefited from the booming real estate market.

💡Real Estate Market

The real estate market encompasses all property-related transactions, including buying, selling, and renting of land and buildings. The video script provides an analysis of the real estate market in Calgary, discussing factors such as supply, demand, immigration, and affordability that have influenced the market dynamics and housing prices.

💡Inventory

Inventory in the context of real estate refers to the total number of homes available for sale at a given time. The script suggests that there is a lag in increasing inventory to meet the high demand in the market, which is a contributing factor to the rising housing prices. The lack of inventory is a critical issue in the current real estate situation.

💡Financial Future

Financial future refers to the long-term economic prospects and stability of an individual or family. The video script advises viewers to consider the importance of real estate in securing their financial future, suggesting steps such as saving for a down payment and improving credit ratings to prepare for future real estate investments.

Highlights

The city is experiencing a boom with increased property values due to high migration for affordable homes and jobs.

The past year has been a 'Tale of Two Cities' for homeowners and renters, with homeowners benefiting from increased net worth and renters facing increased costs.

Calgary is in uncharted territory with record migration and people leaving the country, making predictions for 2024 challenging.

The Calgary real estate board underestimated the 2023 average benchmark price by nearly 10%, showing the unpredictability of the market.

Supply and demand dynamics, particularly strong immigration, have led to a significant increase in housing prices despite high interest rates.

A decrease in sales year-over-year was offset by a 30% increase in rent, making home purchase more attractive for many.

Affordability concerns have shifted buyer demand towards more affordable housing options like row housing and apartment-style condos.

Persistently low supply levels in 2023, especially for homes under $1 million, heavily favored sellers and affected pricing and availability.

Calgary's affordability is being challenged, with the cost of owning a home now requiring 47.1% of a household's income.

Comparatively, Calgary remains a more affordable option in the Canadian real estate market despite recent affordability declines.

Sales declines in semi-detached, detached, and row housing markets were due to a lack of available properties, leading to price increases.

Apartment-style condominiums saw a 133% increase in sales compared to the previous year, making it the market outlier.

Surrounding markets outside of Calgary are attracting buyers due to more affordable living options, impacting local market conditions.

High immigration is expected to continue driving demand in the real estate market in 2024, potentially outpacing supply.

Inventory is not expected to increase significantly to meet market demands due to construction lag times and trade shortages.

Interest rates are predicted to either stabilize or decrease in 2024, potentially inflating asset prices and further driving up the real estate market.

The speaker predicts a 10% increase in real estate prices for 2024, possibly even higher, and advises potential buyers to prepare financially.

Financial advice is given to not give up on the real estate market and to make informed decisions based on individual circumstances rather than external pressure.

A calendly link is provided for no-pressure consultations to help individuals determine if now is the right time to buy or sell property.

Transcripts

our city is booming people are moving

here every day in search of affordable

homes and great paying jobs and over

this last year that's meant an increase

in property values for homeowners

everywhere but there is another side to

that story this past year has been A

Tale of Two Cities if you're a homeowner

you've enjoyed increased property values

more net worth due to the high migration

of people to our province in search of

affordable homes and high-paying jobs if

you're a renter you've experienced

increased costs less affordability and

less job security that's what makes this

different from other years it's not

really a feel-good story on one hand

Canada is experiencing record migration

and on another hand we're also seeing

record levels of people choosing to

leave this country here in Calgary we're

in Uncharted Territory and that's why in

this video we're going to be taking a

look at what's happened this past year

in order to lead us to today and what we

can expect to to find in 2024 that's

right I'll be making predictions of

where I believe the market will be 12

months from now just yesterday I

received the housing stats package for

2023 from the Calgary real estate board

and as I unpacked it it became clear

that there is a general theme strong

immigration consistently low Supply in

the housing market led to a significant

increase in housing prices now I know

many of you listening to that are going

to think that's insane like how can

people afford Homes at these prices

where are all these jobs that support

this well if you feel that way you've

got company the Calgary real estate

board they felt the exact same way at

the beginning of last year they looked

at everything they thought of the high

interest rates and they said hey you

know what by the end of 2023 housing

will be roughly

$526,000 for an average Benchmark price

how wrong were they off by nearly 10% it

actually finished the year at

$570,000 how's it possible that they got

it so wrong how how can house prices

increase so quickly at a time when it

feels like no one can afford them well

the answer is deceivingly simple supply

and demand so we might look at things

like higher interest rates and lower job

growth as a reason that housing prices

should drop but when the demand from

immigration is so strong that it

outpaces those downward pressures it's

going to mean that pricing is still

going to rise so will that continue in

2024 well to get an answer to that let's

take a deeper look into what happened

last year if we take a broad view of the

market first thing that we'll see is

that there was a slight decrease in

sales year-over-year 2022 was a banner

year and 2023 was a little bit less but

still

27,600 helped support Calgary real

estate prices last year this is because

rent actually increased 30% last year

and that means that many people were

actually better off purchasing a home

because it would have lower monthly

costs than just paying that increased

rent affordability is an issue that's on

the minds of every Canadian you can see

it in news articles you can definitely

read it in the comment section below

videos like this one but people are

concerned with the High Cost of Living

and that has had an impact on the

Calgary real estate market it has

dampened demand to a certain degree but

it actually didn't kill it it just

shifted the demand of home buyers to

more affordable products so Row Housing

and apartment style condos they're the

ones that experienced the greatest

growth this past year but once again it

was Supply that drove the real estate

market in 2023 in fact here's a direct

quote from the Calgary real estate board

the year 2023 was marked by persistently

low Supply levels averaging 44% below

the 10year average such a tight Supply

especially for homes priced below $1

million led to a market that heavily

favored sellers affecting pricing and

availability that is a quote saying that

homes under a million dollar the more

affordable segment are the ones that

still moved quickly now if you're from

Calgary that doesn't feel affordable but

I want you to zoom out for a second and

look at all of the Canadian real estate

market relatively speaking Calgary is

still a bargain however in a recent

article the RBC analyst noted that

Calgary is starting to lose a bit of its

Edge it now takes

47.1% of a household's income just to

service the debt on their mortgage

that's up 8% from just a year ago now

that's not great news but here's a

direct quote from that article that

outli how Calgary Compares with other

cities while the bar is rising for home

ownership in the western City of Calgary

the already dire situation got worse

worse for buyers last quarter in the

Vancouver area where the cost of owning

a home reached an astounding

102.6 per of income in Toronto

affordability deteriorated to its worst

level on record at

84.1% with Victoria rounding out the top

three at

76.1% after backtracking on Improvement

in the first and second quarters and

it's those kind of numbers that are

driving more people to Calgary in fact

let's take a look at the different areas

and market segments here just a brief

overview so you get an understanding of

where things are at we saw a sales

decline in the semi detached detached

and the row hosing markets but that was

basically because there was just nothing

for sale and so in each one of those

segments we saw increases in price we're

now at almost $700,000 for a single

family home here in Calgary now it's the

apartment style condominium that was the

real outlier in the data in fact this

was the one segment that actually had

more sales than the year prior and it

impacted pricing by over

133% it's also important to note that

we've got three markets that are just

outside of Calgary arry Okat coses and

Cochran and many people choose those

destinations because they're a little

bit more affordable than living right in

Calgary and each of those areas

obviously also performed very very well

because of their affordability it kept

market conditions very very tight and it

meant an increase in housing value as

well

now that we understand what drove price

is in

2023 we can start to look at what might

happen next year I'd like to ask you

three questions to see if we can figure

this out together the first one is

immigration will we continue to see high

immigration in

2024 well based on the unaffordability

of other housing markets and based on

the high immigration into Canada I still

believe that that is going to create

that same strong demand that sameet

Market Force that drove us last year is

going to carry us right through this

year so the next question is are we

going to see an increase in inventory to

meet the needs of that demand well the

truth is I don't think so you see there

is a long lag time between getting

building permits and organizing trades

which are really hard to find these days

and then building properties all just to

meet the demands of today so that could

take a year or two well the other way

that demand could be met is if more home

owners decided to sell their proper

properties and maybe move into another

property but in reality that's sort of a

net neutral gain they sell one they take

another and often times people aren't

bringing those properties to the market

because they're worried that there's

nothing else out there that might meet

their needs so it's for those reasons

that I just don't see inventory coming

back to the market at a pace that's

going to be able to offset those High

demands and the final question is what's

going to happen to interest rates what

do you think everything that I'm reading

is telling me that we're at the peak for

interest rates the Bank of Canada does

not appear to have any appetite to

increase interest rates in 2024 in fact

most analysts are betting on anywhere

from three to five cuts next year now

what will happen if interest rates

actually lower this is what scares me

about the 2024 real estate market is

that so many people are going to sit on

the sidelines and wait for properties to

drop and I don't believe it's going to

happen so many people are waiting for a

situation or a time where it feels more

fair so many people are looking at the

price of everything and saying that the

Canadian real estate market is a house

of cards just waiting to fall down but

is that true look I don't have all the

answers but I do see one thing to be

true people who aren't paying attention

right now are heading into a perfect

storm immigration is likely to continue

that demand will likely stay high

interest rates are either going to stay

where they're at increase just a touch

or likely come down significantly

inflating the price of all assets and so

if interest rates do fall and I believe

they will and I think they should it

will likely mean that there'll be even

more people chasing those few homes that

come to Market so I predict prices are

going to go up I'm actually in agreement

with the Calgary real estate board

that's saying 10% however I'd only add

in this I'd be surprised if it isn't

much more than that I know many people

have looked at this situation and felt

like they'll never be able to afford

real estate but if it is important to

you and I think it should be because it

is so vital to the financial futures for

so many families there are steps that

you can take today to start setting

yourself up for that future whether it's

saving a little bit each month towards

that down payment or setting up a

financial plan or having a safety net in

place for when something comes along and

surprises you maybe it's as simple as

getting your credit rating in good

status because that will make such an

impact on the mortgage terms that you

will get when you are ready but my

message to you is don't give up and when

the time is right don't feel pressured

don't let fomo family friends some

doomsayer YouTuber or some realtor

convince you to buy at a time that it's

not quite right for you now I understand

for some of you it's going to be hard to

listen to a realtor on YouTube because

you might be thinking Brad you just want

me to sell my home right now or you want

me to buy a home right now you want me

to take some action but the truth is I

actually don't in fact for some of you

now would be a terrible time to buy if

you're going to be house poor if you

have job insecurity I implore you please

do not let fomo drive you to make some

poor financial decision if you have a

strong financial position if you have a

great job and if you have the means

don't let that stop you from buying in a

market like this every everyone's

situation is different it's individual

and so if you'd like to explore yours a

little bit more we actually have a

calendly link in the description below

where you can book A Time as a home

buyer or a home seller to get a no

pressure consultation absolutely free of

charge where we look at your situation

and help you decide if now could be the

right time now we got a ton of more

great content on this channel so we got

a playlist right here if you want to

check it out and if you never want to

miss another video or if you want to

just check back in a year from now and

give me heck for missing on my

prediction just subsscribe