By Rebecca Wissink

The Canada Mortgage and Housing Corporation (CMHC) has released its 2022 Market Outlook, which includes both a national forecast and one specific to Calgary. This article covers the forecast, the socio-cultural issues impacting Calgary and Alberta that led to the forecast, the risks that could derail the forecast, and we’ll touch on the national forecast. Briefly, Figure 1 below shows that sales are expected to drop or moderate after this year, even at the higher end of the forecast, as 2023-24 will likely have lower sales than 2021. The average MLS price will climb each year from 2021, gaining between $35 – 40,000 each year at the high end of the forecast. However, at the low end of the forecast, price gains will be minimal this year when compared to 2021 and could drop slightly in both 2023 and 2024. In sum, CMHC’s Senior Analyst of Market Insights, Michael Mak, believes that given Calgary’s economic recovery, housing sales ... [are expected to] continue at an elevated pace,” although in time they will be “hampered by rising mortgage rates.”    


Figure 1. Calgary’s Resale Market Forecast, lows and highs, from 2022-24 (Source CMHC, Housing Market Outlook, p.18) 

Both sales and prices for all home types are expected to slow in the latter half of 2022. Like other forecasts for Calgary home prices this year, CMHC anticipates about five percent growth this year on average, which will slow in 2023 and then further moderate in 2024. However, because this area will likely continue to see solid demand, home sales should remain robust, particularly for single family homes in the first half of 2022. Buyers are still trying to “lock-in lower mortgage rates amidst expected rising … rates throughout the year.” Thereafter, as buyers get priced out of detached homes, demand will increase for townhomes and condos, although the price growth in this segment is expected to remain “moderate.” This is due to the high condo fees in Calgary which negatively impact a buyer’s budget. To summarize, “Alberta will likely see relatively strong sales,” “stimulated by energy sector investments and higher energy and commodities prices.” Yet, “the growth in prices is predicted to remain well below the national average reflecting more balanced supply conditions than in other regions.” However, sales will “remain at levels well above the muted activity in the post-2014 oil glut.” 

CMHC notes five positive socio-cultural factors influencing Calgary’s housing market, and only one problematic factor. On the positive side, there will be continued economic recovery in all sectors, including those that were still struggling due to the COVID-19 pandemic. CMHC forecasts “sustained elevated energy prices for the near future,” which will spur economic growth in the city. This will include a reduction in the unemployment rate as Calgary moves towards its pre-pandemic level for full-time employment. As I’ve written elsewhere for Ross Pavl, Calgary is finally seeing population inflow once again. These are all positives that will buoy and sustain the local housing market. However, there is a negative that “will act as a headwind for home prices and sales,” and that is rising mortgage rates. Calgary’s home prices are up almost 18% year-over-year according to the Calgary Real Estate Board, although detached homes are up 20%, having now reached a benchmark price of $620,500. Elsewhere, I have noted that the bulk of Calgary’s inventory (57%) as of March 2022 was for homes over the $600,000 price point. This price, coupled with increasing interest rates, will simply force some potential buyers back onto the sidelines, into the outer lying communities, or into townhomes and condos. 

I’ve said before that forecasting is an inexact science, and as such, CMHC’s forecast is presented via a range to compensate for the “numerous sources of uncertainty” in our world right now. Frankly, the COVID-19 pandemic is all the evidence I need to offer to prove we simply never know what is coming that could drastically disrupt society. In fact, the emergence of a new variant that causes widespread lockdowns is a risk noted by the CMHC for this forecast. And media headlines already suggest that some scientists believe Canada will experience a sixth wave of the pandemic in the fall. The war Russia has started with Ukraine is another noted risk to this forecast for several reasons, including the war’s impact on the price of energy and supply-chain problems, both of which contribute to inflation. “Tighter labour markets” will also contribute to “stronger-than-expected inflation pressures.” These four variables that can increase inflation in turn almost guarantee that the Bank of Canada (BoC) will continue increasing the overnight lending rate. And when the BoC raises its lending rate, the banks pass that onto mortgage borrowers, which creates another risk that could downgrade the noted forecast into its lower end. Finally, there is one risk specific to the Prairies, and the “current energy and commodities shortage” could go either way for Alberta. If producers can “rapidly expand to meet demand,” the increased need for labour will pressure the housing market, in turn “pushing sales and prices beyond the upper range of our forecast.” However, should energy and commodity prices drop, the forecast will sit in the lower range.  

On a national level, which tangentially impacts Alberta, after years of largely closed borders, “net international migration is expected to strengthen in 2022.” Any increased demand will drive price growth in markets that have a low number of listings.

However, “mortgage rates are expected to rise as monetary policy tightens to return current elevated inflation rates to targeted levels. The impact from higher rates on housing demand and price growth will be muted in 2022” even though we still haven’t reached the 2019 overnight lending rate of 1.75%. Thus, nationally, in 2022, “the level of home sales and the pace of price growth will remain elevated compared to long run averages but will decline from their respective 2021 peaks.” CMHC anticipates that by late 2023 to early 2024 both sales and price growth will be back in line with historical averages, given the overall downward trend anticipated due to higher rates and the current high prices of homes which have seriously impacted affordability.  

If you have any questions about the Calgary area real estate market, please contact an experienced Ross Pavl ELITE Real Estate Group Realtor®.  

Note - “All CMHC analysis and forecasts of market conditions are established by using the full range of quantitative and qualitative tools currently available. To account for the numerous sources of uncertainty, forecast ranges are incorporated.”  

Note – The forecast for Calgary is far above the housing market correction/crash that Oxford Economics has predicated for Canada. 

Note - This forecast was “based on information available as of March 9th, 2022.”  

Cover photo via creative commons courtesy of Bernard Spragg

Posted by Ross PAVL ELITE Real Estate Group on


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