**Calgary’s Market Stabilizes But interest rate drop may bring more buyers** SPRING HAS FINALLY SPRUNG IN CALGARY, THE CITY IS GREEN AND SPIRITS ARE HIGH AS THE SUMMER approaches. May and June are typically the busiest months of the year when it comes to sales volume, and we are seeing that in 2024 with strong sales figures yet again. In May, Calgary observed 3,092 sales – the highest of the year so far. However, there are some signs that the Calgary market may have seen the majority of its anticipated price gains already, with pricing up just $3,000 from last month to an average sales price of $605,300, on the heels of a $5,000 increase the month prior. Calgary follows a very consistent seasonal cycle, with sales volumes and pricing ramping up from January through to mid-summer, and we are seeing that same pattern in effect now. **THE CALGARY MARKET IN MAY** What’s been different in 2024 is that we’ve seen price gains coming earlier than we usually do. February, March and April saw pressure on the market that we typically only see in the late spring and early summer months, with Months of Supply coming in at 1.1, 0.95 and 0.94 respectively. This is in contrast to the same period a year before, when in 2023 we had Months of Supply coming in at 1.58, 1.33 and 1.2 between February and April. So, the takeaway here is that Calgary got off to a very hot start in 2024 and might be peaking just a little earlier than we would usually expect. There are a couple of other signs that support this theory, the first being the relatively flat sales growth from this time last year, with 3,092 sales essentially equaling the 2023 numbers. This is in contrast to previous months, which all posted high single-digit gains over their 2023 sales figures. In addition to this, we are seeing a lot more new listings this month compared to last year, with 4,333 new properties coming to market – a full 19% more than we saw in 2023. So, double-digit new listings coupled with flat sales would support the notion that prices won’t be climbing as fast as we saw earlier this year. **THE IMPACT OF LOWER INTEREST RATES** What could change that, though, is the recent announcement by the Bank of Canada to lower the key lending rate by 0.25%, to 4.75%. This will make things a little bit easier for borrowers, enabling both first-time buyers and trade-up buyers to get into slightly higher price points. It’s not a huge move, but considered a “step in the right direction,” as many real estate economists feel that rates need to lower to avoid a shock to those that refinanced during the pandemic years of 2020 and 2021, given that the 5-year anniversary dates for those loans would be coming up soon. Most of the press and lending economists seem to agree that rates will come down by several steps to get closer to a key lending rate of 2%. So, our advice hasn’t changed and anyone shopping right this minute should consider a variable rate product to make sure they don’t miss out on rates that could come down as the market slows heading into the fall and winter. **THE PRICING PICTURE** With respect to asset class specific data, all four segments are up considerably compared to last year, with Detached pricing coming in at $761,800. Semi-detached prices were $678,000, Row pricing was $462,500 and Apartment prices were $340,500. All of these values are double-digit increases compared to the same data points in 2023. However, there is one segment worth a separate discussion, and that’s Apartment condos. Anyone shopping right now should consider a variable rate product to make sure they don’t miss out on rates that could be coming down. May 2024 was another tight month, with only 1.1 months of housing supply. While posting a very healthy 18% increase over May 2023, prices for Calgary apartments actually dropped month-over-month from, coming down by almost $6,000 from April to May. This may be an aberration, however it’s relevant for this particular asset class because of the record-setting 19,579 housing starts we saw in 2023 – a full 50% of those being Apartment condos. This has been a trend we’ve seen for nearly a year now and it is fueling the increase in market share that the condo apartment segment has been taking. This should serve as a note of caution for condo buyers, because this segment is seeing more supply added than any other – by a significant margin – which means that price gains for condos should level out as increasing supply helps to quell demand. So, if you are buying a condo with the intent of keeping it forever, don’t worry about it. But if you are hoping to trade up into a Row townhouse or small Detached home, it may be wise to monitor the listing volumes of condos in the years to come as there is risk that price gains on Apartment condos will slide beneath that of the Detached segment once the supply of new condo projects works its way into the re-sale market. **CITY-WIDE BLANKET REZONING** In local news, the contentious ‘blanket rezoning’ proposal was voted through after an historic hearing process that saw more members of the public speak in a hearing than had ever occurred before. The rezoning will take place this summer, meaning that all lots in Calgary will now be zoned for up to four units instead of just one. But just because the zoning exists does not mean that every lot has the potential of being redeveloped. Quite the opposite, in fact, as the bylaw is quite restrictive when it comes to what can be built due to factors such as lot coverage, offsets from streets and laneway requirements to facilitate parking. So, there will certainly be some redevelopment but it’s not as though we will see communities being forever altered from what they look like now. One notable amendment to the proposed changes is that Row townhouse complexes will now be a discretionary use, not a permitted use. So, if you are concerned about a development going up near you, you will have an opportunity to make your case against it before it gets approved. **END OF THE ROAD FOR EAU CLAIRE MARKET** Calgarians will have one last look at the Eau Claire Market in early June as the building is set to be demolished this summer to make way for the Green Line LRT station that will reimage this historical plot of Calgary real estate for future generations. The station will be the northernmost stop on the first phase of the Green Line that will extend as far south as 130th Avenue SE when it is completed. **STUDY TO EXPLORE CAR-FREE 17TH AVENUE** 17th Avenue SW is also making the news, as the City is launching a study to explore the possibility of closing the street to vehicle traffic in a pilot project for next summer, following the lead of other cities that have sought to preserve commercial / retail walkability in their established commercial corridors. Our sales agents recently attended a conference in Banff where iconic Banff Avenue has been closed to vehicle traffic and it did lead to a more vibrant feel amongst the shops, bars and restaurants there, so this will be a curious development to watch and see if it comes together. As always, everyone’s real estate situation is highly unique to them. Are you curious about what your property could be worth, or what it might cost you to move to an area you’ve had your eye on? We are always here to help and happy to get you the answers you need. So from all of us at Redline I hope you have an excellent spring and we will see you in a month’s time to kick off the summer.

THE HEAT IS ON!  Tight Market Driving the Political Scene   We are one third of the way through what is shaping up to almost certainly be another record-breaking year in Calgary real estate. Calgary finished off 2023 on a bit of a whimper, with six consecutive months of the average sales price being essentially flat at approximately $570,000. But, since turning the corner into 2024, it’s like our market has heard the starter’s pistol and began sprinting at full speed, with healthy increases to the average sales price in each of the last four months amid strong pressure on available supply. In April, Calgary finally broke through the $600,000 price plateau, coming in at an average sales price of $603,000, which is approximately 5% in total gains since the start of the year and a full $50,000 more than the average sale price just 12 months ago. Echoing the strong seller’s market conditions we saw in March, April 2024 was also another extremely tight month, coming in at 0.94 months of housing supply. Two months in a row of this kind of pressure almost guarantees that the upward trend in prices will continue as we head into the summer. It also means that, in addition to facing very little selection, would-be buyers will face competition on almost any listing they consider, as more and more buyers compete for fewer and fewer available properties. The Detached segment inched closer to breaking though a barrier of its own, as the average sale price for a detached property came in at $749,000 in April. Semi-detached pricing came in at $668,400, Row townhouses at $458,000 and Apartment condos at $346,200. All four categories posted double digit gains over the figures we observed in April of 2023. It’s not just prices that are going up, though. Our market is getting more active, with a little over 200 more sales in April than in March, to a total of 2,881. New listings are up, too, with just under 3,500 new properties coming to market last month. Last month we explored some of the reasons that our market has been so hot this year – lots of positive net migration, employment gains and our relative affordability compared to Vancouver and Toronto being the key factors. This month we’ve observed the politicisation of housing reform, as all three orders of government made headlines trying to win points with the voting public as attempts at increasing supply are made to address the “housing crisis” – an issue so pervasive across Canada that it will remain in the policy conversation for years to come. In April, Calgary observed a record-setting public hearing at city council, when over 700 people signed up to speak to council for five minutes each regarding the proposed amendment to the bylaw, which would change the base zoning in Calgary from R-C1 to R-CG. If approved, every lot in Calgary would now be zoned to allow up to four dwelling units as opposed to just one. It’s a big change that has really stirred the interests of Calgarians. The issue goes back to September of 2023, when city council gathered for an emergency session to debate the proposed bylaw amendments brought forth by a panel of experts that made up the “housing affordability task force”. It was this task force that recommended changing the base zoning. After a day of debate, city councillors voted in favor of the recommendations 12-3, which set in motion months of community engagement and then, ultimately, the hearings that took place this month prior to a vote by council. But it was shortly after the September 2023 vote in acceptance of the task force’s recommendations that the federal government promised Calgary $228 million dollars in housing support… as long as they ‘removed exclusionary zoning’ from the city’s land-use bylaw. Mayor Gondek, one of the supporters of zoning reform, latched onto this offer as one of the reasons to move forward with the change.  Displeased with the federal government going around the provincial government, Alberta premier Danielle Smith then proposed Bill 18, a bill that – if enacted – would make it illegal for Alberta municipalities to accept federal funding without first obtaining approval from the provincial government. Cleary a centralization of power for the provincial government, and perhaps not in the best interests of constituents who could use the federal funding regardless of any hurdles the Alberta government seeks to put in place. We can see how such a pressured real estate market is driving politics at all three levels Shortly after Bill 18 was proposed, the Alberta government also proposed Bill 20 – the “Municipal Affairs Statutes Amendment Act” – which would give the Alberta cabinet the power to dismiss councillors and mayors in any municipality and also repeal or amend local bylaws. In addition to      

Population growth fuels a hot start for Calgary This month, we have some incredible news to share regarding Alberta’s population growth relative to the rest of the country, the effects of which have shifted Calgary’s real estate market into top gear several months earlier than expected. Tight supply levels we typically only see during the peak summer months have pushed prices higher for two months in a row now, going up by over $12,000 in each of February and March 2024. How is it that this can keep happening month after month? What is it that is driving all this market activity? The survey results are in and the population growth numbers provided by Statistics Canada explains our incredibly hot market conditions. Statistics Canada reports that Alberta is demonstrating unprecedented growth, adding over 200,000 people in 2023, with many of them choosing to settle down in Calgary. In fact, last year saw Alberta achieve the highest levels of interprovincial net migration ever observed by Statistics Canada since they began tracking this metric in 1972. Wow! The numbers are startling, as Canadians seek refuge from the insanely unaffordable markets of Vancouver and Toronto, each of which have average prices of over $1 Million. This incredible population growth has pushed up demand for real estate in Cowtown, bringing the average price of a piece of real estate in Calgary to $597,600 at the end of March, up from $585,000 in February.This marks the second month in a row that we’ve seen 5-figure increases, both of which are up by over 10% from last year. This is a sharp upward adjustment from what was a very tame fall and winter, when prices stayed pretty close to the $570,000 mark between August 2023 and January of this year. But Calgarians would now need to pay 5% more that figure already, just three months into the new year. Quite the jump! Sales have also picked up, with 2,664 sales taking place in March. We’ve not seen those numbers since last August, which has driven down the available supply and correspondingly the Months of Supply metric most commonly used to evaluate whether we are in a buyer’s market or a seller’s market. As you can imagine we are very much in seller’s market territory, as we have been for over a year now. In fact, we can now say that we have the tightest conditions our market has seen since 2006, with less than one month of supply available for buyers to choose from! We would have expected these tight conditions closer to the peak selling months of May, June & July, so to see it occurring in March is a strong indication that we will have very tight conditions throughout the busy summer selling season. Why is this happening? Well, it is simple supply and demand. Alberta is positively booming, growing by over 200,000 people in 2023, by far the most of any province in the country. In fact, most provinces in Canada are losing people because they are moving to Alberta! Check out the graph below, which tells a profound story – Alberta is indeed the #1 destination for all Canadians contemplating a move and, as the largest city in Alberta, Calgary has seen many newcomers arrive needing housing. Alberta’s relative affordability is certainly playing a large part, given the high prices consumers have to pay for housing in Vancouver and Toronto. What’s interesting is that Alberta has now regained its growth trajectory that it gave up during the economic downturn between 2015 and 2020, as we continue to increase our overall share of the Canadian population, recently reaching a record high of 11.8%. Go Alberta! Breaking things down a little more closely, we have seen price increases across all segments... Detached pricing is now at $739,700, Semi-Detached is at $658,000, Row Townhouses are just under $450,000 and Apartment condos are approaching $340,000. Increasing prices are symptoms of a more concerning trend, however, which is the low new listings-to-sales figures we saw last month. Taking a look at the graph, below, you can see a stark difference when this year’s numbers are compared to last year. Sales are up by about 10%, however new listings are actually down by 4%. The combined effect has resulted in sales actually outstripping inventory, something that we haven’t seen at all in the last 12 months of trading. So, if you are a buyer looking to get into the market, is there any relief in sight? Well, to make things a little easier it is now widely expected by most economists in Canada that the Bank of Canada will begin cutting the key lending rate this spring or summer, with both CIBC and the British Columbia Real Estate Association forecasting rates to start coming down gradually beginning this month. This is good news for anyone seeking to qualify for a new purchase, but also for existing homeowners with a variable rate mortgage. In fact, because of this widely held belief that we will start to see rates coming down, we feel that anyone who is about to take on a new mortgage or renew an existing one should strongly consider going with a variable rate mortgage product for their next loan, given the general acceptance that rates will start to trend downwards from this point forward. In local news, Calgary city council voted down a motion to take the proposed “blanket rezoning” changes to a plebiscite vote, instead deciding to go ahead with the planned public hearing. This hearing, and the vote by council thereafter, is surely to be the biggest story in Calgary real estate this year, as city hall will decide whether or not to change the base level of zoning for all residential properties in Calgary from R-C1 to R-CG. That would mean the number of allowable structures on a property would go from 1 to 4 – a big change. Because of changes made to the bylaw in previous years, a move to R-CG would also allow secondary suites in each dwelling unit, raising the total number of allowable units on a single parcel to 8. A big difference for sure, but one that doesn’t seem so crazy especially considering that the federal government is trying to put pressure on provinces and municipalities to make this zoning change in order to access over $15B in funding for rental apartment construction, so Calgary is actually ahead of the game when it comes to proposing sweeping changes to the land use framework for development. The public hearing happens April 22 and is part of a months-long process by the city to seek engagement and feedback from the public before taking the matter to a vote later this year. Now, we won’t go into too many details here, but if you would like to know more about the impacts of this proposed change you should definitely check out our YouTube channel, where we explain the changes in detail and also the results of the special hearing of council from last September, where they heard from the public and debated the merits of the proposal laid out by the housing affordability task force commissioned by the city in 2023. This is a contentious issue to be sure, and one you can bet we will be following closely as it develops.  

When embarking on a home search and eventually becoming a new homeowner, there are various costs to consider, commonly known as closing costs. In Calgary, Alberta, these closing costs can vary, and it's essential to be aware of what to expect. Here is an overview of the typical closing costs in Calgary:   1. Home Inspection: For an average-sized home, the cost of a home inspection ranges from $400 to $700. It is advisable to invest in a home inspection to identify any potential issues and gain peace of mind. Condo inspections are usually cheaper, ranging from $200 to $400.   2. Home Inspection on a New-Built Home: It is recommended to have a home inspection even for brand-new homes, as it allows any deficiencies to be addressed by the builder.   3. Additional Costs after the Home Inspection: If any significant issues are discovered during the home inspection, additional testing or consultations with certified professionals may be necessary, incurring extra costs.   4. Condo Document Review: When purchasing a condo, a condo document review is crucial. Specialized companies in Calgary charge approximately $300 to $500 to examine the bylaws and financials of the condo.   5. Water Well and Septic Field Test: For acreages, it is strongly advised to have the water well and septic system tested. The cost for a septic system inspection ranges from $350 to $500, while a well inspection can cost between $1,000 and $1,500.   6. Lawyer: Hiring a real estate lawyer is a standard part of the buying process. In Alberta, the average cost of a lawyer is around $1,500, which includes tasks such as fund transfers, title checks, and registration.   7. Realtor Fees: Realtor fees are typically paid by the seller, but there may be cases where the buyer needs to cover a shortfall, primarily with discount brokerages, builders, or self-represented sellers.   8. Appraisal Fee: Many lenders require an appraisal to assess the property's value before lending money. The appraisal cost ranges from $200 to $400, and it may be covered by the lender or paid by the buyer.   9. Mortgage Insurance: Mortgage insurance premiums vary based on the buyer's down payment. If the down payment is less than 20%, a premium is charged. Different mortgage insurance companies offer similar rates, such as CMHC.   10. Land Transfer Fee: Alberta does not have a land transfer tax but charges a land transfer fee, which varies based on the home's value. The real estate lawyer handles these fees, and the buyer reimburses them.   11. Title Insurance: Title insurance protects against potential issues with the property's title and costs around $200 to $300 for the average home. The buyer typically reimburses the lawyer for this expense.   In addition to closing costs, it's important to consider ongoing costs for homeownership:   - Home Insurance: Required by lenders, it covers damage to the property and is paid annually. - Property Taxes: Vary depending on the property and community. - Condo Fees: Monthly contributions for maintenance, improvements, and services in condo buildings. - HOA Fees: Some communities have Home Owners Association fees for community upkeep and amenities. - Utilities: Monthly costs for gas, electricity, water, and sewer services. - Maintenance: Every home requires ongoing maintenance, and associated costs vary.   Keep in mind that these costs are subject to change, and it is essential to consult with professionals for accurate and up-to-date information.