There has been lots of news in the Canadian real estate market as of late. Some of the announcements and changes will eventually have an impact on Canmore and the Bow Valley real estate market.
First is the Federal Government’s proposed ban on foreign ownership:
In Budget 2022, the government proposes to introduce new legislation to prohibit certain foreign entities and individuals who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a period of two years. Refugees and other individuals fleeing international crises are to be exempted from the prohibition. International students on the path to permanent residency would also be exempt in certain circumstances, as would individuals on work permits who are residing in Canada.
We are waiting on further clarification on this; however, Canmore and the Bow Valley are generally considered recreational properties and this ban would not apply. Further, the Town of Canmore considers Visitor Accommodation use properties to be commercial. As a result of this ban, we may see more foreign and non-resident purchases of property in the area. There are many expats, non-residents, Americans, British and Europeans who have seasonal homes in Canmore. We expect to see continued demand for seasonal recreational properties from these buyers.
Secondly, rising interest rates. Rates are still below historical levels in Canada. Rising rates will have some impact on first time buyers already having challenges getting into the market due to the significant increases in prices over the past two years. Anecdotally, we have had a lot of buyers coming from larger urban centres in Canada over the past year. If rising rates start to cool those markets, we may see fewer of these buyers. However, most of these buyers have very good equity in their homes and are often making a full time move to the Bow Valley.
Thirdly, Ontario and Nova Scotia have both introduced non-resident taxes. These taxes may have buyers looking to more favourable tax destinations like Alberta.
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Looking at the first quarter of 2022, real estate sales in Canmore, Harvie Heights, Dead Man’s Flats, Lac Des Arcs and Exshaw remained strong. There were 107 residential sales and 95 short term rental sales in Q1 2022. Year over year, residential sales decreased 50% as active inventory levels were almost 50% lower than 2021 for the same period. Short term rental sales increased 4% year over year. Between Q4 2021 and Q1 2022, residential sales decreased 7% from 115. The five year average for Q1 is 187 sales.
Detached and Semi-detached home sales increased in March with 34 sales in Q1. The average sale price was $1,588,073 an increase of 16% over Q1 2021. The Q1 median sale price was $1,454,500 an increase of 24% year over year.
As more properties came to market in March, townhouse sales also increased with 30 sales in Q1. The average sale price was $980,089 an increase of 31% year over year. The median sale price was $859,250 a 28% increase year over year.
Ranging from top floor penthouses to first time homes, there were 42 apartment condominium sales this past quarter. The average price was $630,942 a 6% increase year over year while the median price was $591,500 also a 6% increase year over year.
The short term rental market continues to be very strong, sales were 47% of total sales in Q1 2022. The average price increased year over year 43% to $677,458. The median price was $688,850 an increase of 46%.
Within all these segments of the market, there are additional sub-segments where certain areas have increased more than others. We are happy to chat about your specific type of home if you have more questions.
With the spring weather, we have started to see more properties coming to the market. There are currently 59 residential units on the market; a year over year decrease of 38% and a month over month increase of 28%. Short term rental use listings have increased 31% month over month to 51 active listings. We expect to continue to see new active listings coming to market over the next few months.
When looking at long term trends, residential active listings in April are still 43% below the five-year average. Sales of residential properties for March are 13% above the five-year average with 51 sales this past month. The real estate market is still very much in a seller’s market with a month and a half or less active inventory amongst all property types; generally, a balanced market would be between five and eight months of inventory or a sales to listings ratio of 12-20%. With the increasing levels of active listings as we head further into the spring market we may see the absorption rate shift but it will take significant new listings and fewer sales to move us towards a balanced market.
