While higher lending rates are expected to influence housing demand in 2023, there may be a shift in Airdrie's tight housing market, according to the Calgary Real Estate Board (CREB) yearly outlook report.
“Higher commodity prices, recent job growth, record high migration and relative affordability are expected to help offset some of the impacts higher lending rates are having on housing demand. At the same time, we are entering the year with low supply levels which are expected to prevent significant price declines in our market,” said CREB Chief Economist Ann-Marie Lurie.
According to the report, while there may be slightly more houses for sale, supply levels are expected to remain relatively low both on the resale and new home side, which may very well place limits on price adjustments in 2023.
In 2022, Airdrie real estate sales hit a record high, which was due in part to very high sales at the beginning of the year.
"However, like other markets, conditions remained exceptionally tight and caused significant price gains early in the year. Following significant price gains and higher lending rates, sales activity started to ease over the second half of the year, enough to cause some modest gains in inventory levels and shift the market away from the extreme sellers’ conditions," the report stated.
While April 2022 saw a downward trend, the benchmark price for a home in Airdrie was $489,550, remained 20 per cent higher than in 2021.
"Easing inflationary pressure is expected in 2023 which should prevent any significant rate gains in 2023. While the depth and duration of a national recession can impact both lending rates and inflation, the Bank of Canada is not expected to lower overnight target rates until 2024."
CREB noted that while supply gains have mostly occurred in the higher price ranges, supply levels remain low compared to the demand for lower-priced homes.
"So, while total residential prices are expected to be stable in 2023, buyers and sellers are likely to experience different price movements based on property type, price range and location."
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