Interest Rates and Real Estate - How is the market as we are moving into 2024?

Interest Rates and Real Estate

How is the Canmore Real Estate Market as we are moving into 2024?

Are you a potential buyer and wondering if this is the right time to buy in Canmore? Or are you a potential seller, wondering if you should list your property? Take a look at how the Canmore market has been developing since the Bank of Canada raised the interest rates!

On March 2nd 2022, after leaving its overnight lending rate at 0.25% for two years during the Covid-19 pandemic, the Bank of Canada raised interest rates by 25 basis points to 0.50 percent.

In an effort to curb soaring inflation after the pandemic, the Bank of Canada raised its policy interest rate from 0.25 to 4.25 per cent in 2022. Two more rate hikes followed in 2023 until on July 12, 2023 another 25-basis-point hike (3rd increase in 2023) brought the bank’s overnight lending rate to the current five per cent.

Current projections from economists indicate that interest rates might begin to decrease some time during the 2nd quarter of 2024.

What effect did the high interest rates have on the Canmore real estate market. What are we seeing at the end of 2023 now that the rate has been stable at 5% for 4 months. And what are we expecting from the market over the next few months?

Sales Numbers

Sales numbers for the last quarter of 2023 are not complete but based on present numbers and the anticipation that sales for the remaining 1.5 months will be similar, we are seeing a decrease in sales numbers from 2022 to 2023 of about minus 20%. More, if sales should drop in December. Sales started to drop with the first increase in interest in 2022 and hit a bottom in the first quarter of 2023. However – they have been constantly recovering again since then and seem to remain stable for now.


Listings on the other hand started off low-low at the beginning of 2022. They reached a temporary high in the middle of 2022 when buyers reacted to the new interest rate and sales tanked. And although sales came down further over the remainder of 2022, listings also plummeted. The first quarter of 2023 was also another low point for the number of listings in Canmore. Like sales, listings have been constantly recovering since the beginning of the year and while sales seem to remain stable, the number of listings seems to be on the rise.


“Visitor Accommodation” refers to the zoning and stands for properties that can be used for max. 28 consecutive days at a time. These are typically hotel condos or apartments that allow short-term rentals via Air B&B or similar. Full-time living is not allowed.

“Tourist Home” refers to the zoning and stands for properties that would allow short-term rentals, long-term rentals or full-time living. 

Chart "Sales vs. Listings" is showing extrapolated numbers for the last quarter whilst chart "Sales Numbers" is representing the actual sales numbers at this moment.



Sale Prices

Since we have been seeing a situation in Canmore where over the course of the last 12 months sales and listings have been moving in similar ways, the market has remained robust and property prices did not fall.

This is reflected in the average sale price in Canmore. It was $939,000 at the beginning of 2022 and has been around $1,150,000 for the last 9 months.


The average price/sqft shows a similar picture. Starting at $704/sqft at the beginning of 2022, it hit the $850/sqft at the middle of 2023 where it remained until the last quarter. Based on present numbers of the last quarter, it’s up to $925/sqft now but these numbers can still change until the end of the year.


The following 6 charts show average sale price and price/sqft for the different kinds of properties that we have in Canmore over the last two years. Numbers for the last quarter (here indicated as 8) of 2023 can still change, as we are still missing sales from the next 45 days.

Canmore is a small town, and we are generally deriving our stats from a small number of transactions. When there is only a small data pool, a few outliers can have a bigger effect. Changes from one quarter to the next should therefore be regarded with a grain of salt. Here especially when we look at average sale prices. In cases of extreme changes from one quarter to the next, the price/sqft is usually a more stable indicator.







Summary and Outlook

Summing up, although we have seen quite a decline in sales numbers over the course of 2022 until the first quarter of 2023, sales for the rest of the year have been steady, even increasing. At the same time to our surprise, we have not seen any price decrease for Canmore. On the contrary, over the same time period average prices increased by about 22% from 939,000 to $1,150,000. The price/sqft increased by a similar rate (or at around 30% if we consider the last unfinished quarter of 2023).

While we are still lacking some data for the last quarter, the charts for the different products are not conclusive and suggest that for some products we may be seeing a slight price softening.  However, overall, we are not seeing a price decrease in Canmore – quite the opposite.

Generally, the demand is there, and it remains high and with more properties coming to the market and perhaps some softening in some areas, there will be more choices for buyers just waiting to enter the market again. Buyers expect a steady interest rate over the next few months and maybe a decrease next year. The decision is to enter the market now with less competition but a higher interest or to enter the market later with perhaps a lower mortgage rate but more competition. If the number of listings continues to increase, I anticipate a strong comeback of sales numbers in 2024 with a boost as soon as interest rates start to come down. 

Thomas Krause – CANMORETHOMAS | REALTOR RE/MAX Alpine Realty

Canmore Alberta, November 16th, 2023

Data from Xposure, Canmore and Resale only