Calgary's housing market expected to see moderate growth this year before slipping in 2022

Calgary's housing market is poised for a modest recovery this year as the economy emerges from the effects of the COVID-19 pandemic, according to the Canada Mortgage and Housing Corporation.

The federal agency's annual housing market outlook report says Calgary's housing sector will see stronger resale activity along with new construction this year compared to last, as the labour market rebounds and migration to the city resumes.

"Economic recovery, a stabilizing labour market and low interest rates will support moderate growth in resales and new home construction in 2021, before rising interest rates slow housing activity in 2022 and 2023," said CMHC senior economics analyst Michael Mak.

The report notes that Alberta's economic downturn, coupled with the effects of the pandemic, led to the first quarter of negative net migration to the province since 1994. 

A rebound for Calgary's housing market will depend in part on an uptick in migration, CMHC says.

"The return of migration into Alberta and the Calgary [census metropolitan area] relies on several factors, including a successful vaccination program, stable and strengthening demand for oil in the near to intermediate future and continued loose monetary policy," the report said.

CMHC predicts that single-detached and multi-unit new constructions will moderately increase in 2021, driven by recovering economic conditions, stabilized financial conditions and the anticipated return of migration. 

"However, as we expand further into late 2022-2023, the effects of rising interest rates, as well as elevated levels of existing inventory, will slow down new housing starts, especially in the condominium segment," the report said.