Is the frenzy of the Calgary real estate market a thing of the past? Sorry to say, not quite yet. With spring 2025 just around the corner, the market in the Alberta is looking like it’s gearing up to be another repeat of the last few years.
In this blog, we’ll break down some of the reasons why, so you can get a better idea of what’s coming your way if you’ve been waiting for the “right time”.
1. January Rate Announcement – Another Decrease:
The BOC has already cut 1.75% off interest rates, and there’s a high possibility another cut is coming with the January 29th 2025 announcement. For as long as the inflation rate does not significantly exceed the 2%-3% range (as of December 2024, it’s 1.9%). Most experts predict that the rate will go down to 2.25% by the end of the year.
Another cut will set the stage for another highly competitive and fast paced spring market, bringing a flood of more buyers who’ve been waiting on the sidelines who have been waiting for the exactly this is the “right time” to act. With more buyers, the more balance market we’ve experienced in the last few months will no longer be that— it will be chaos once again.
2. 30-Year Amortization:
First-time buyers and any buyer going for a new builds can now apply for their mortgage amortizations to extend to 30 years instead of the conventional 25. This incentive is going to bring in even more buyers into the market, adding more pressure on builders to pump out homes faster and sure, buyer’s will pay more interest in the long run, but with lower monthly payments up front – that’s a future problem for most, am I right?
3. Insured Mortgages:
Now that the federal government is letting first-time buyers and new-build purchasers stretch their mortgage amortizations to 30 years, this means lower monthly payments and more people getting a shot at entering the market. On top of that, they also cut the down payment requirements for homes priced between $1M and $1.5M, making higher-end real estate more accessible to even more buyer with less money up front…and who doesn’t want the nicest looking house on the street?
4. Population 41M+ in 2024:
Canada’s population jumped by over 1M people in 2024, pushing the total to more than 41M. This growth came from a mix of high immigration and natural population increases, with a big chunk coming from non-permanent residents. Between April and July 2024 alone, the population grew by about 250,000 people. When the population grows by over a million people in a year, it definitely puts more strain on the housing market. More people means more people looking for homes, which drives up prices and makes things harder to find. Builders and developers can struggle to keep up, which means longer waits for new homes and higher costs to build.
5. Spring – The Unhinged Real Estate Market:
Spring is ALWAYS the busiest season for real estate, but this year, it’s shaping up to be the wildest one yet. With rate cuts, new policies, population growth, and limited inventory – the competition is going to be much more fierce than what we have seen in the past. If you’ve been holding out, waiting for rates to come down and looking for the best deals, guess what… so has everyone else. If you’re still on the sidelines, get prepared now because you’re in for a wild one.
Conclusion:
With low interest rates and new incentives for homebuyers, the spring 2025 real estate market is going to be fast and furious. Lower rates and longer mortgage terms will make it easier, especially for first-time buyers, to jump in, causing a big spike in activity. As more people buy, prices are expected to go up, particularly in higher-end markets where the reduced down payment requirements make pricey homes more affordable. Builders might not be able to keep up with demand, leading to fewer homes available, even more competition, and higher prices. Expect bidding wars, quick sales, and possibly a rental shortage, which will make it feel like a seller’s market, even with the buyer-friendly incentives.
Overall, it’s going to be a hectic market where buyers may end up paying more for homes but will need to act fast before prices go even higher.
