Interest Rates in Canada have been going up

Find out how this is influencing the real estate market in Canmore!

On September 7th, 2022, the Bank of Canada raised interest rates by 75-basis points. The benchmark rate increased from 2.5% to 3.25%, a 14-year high. This was the fourth consecutive outsize rate increase and hit a level not seen since April 2008.

Given the outlook for inflation, the Central Bank is anticipating that the policy rate will still need to increase further.

The Bank’s next rate announcement is on Oct. 26th, 2022. It will also publish its quarterly monetary policy report, which lays out the central bank’s latest inflation and economic growth forecasts.

Raging inflation, Covid still around the corner, a War in Europe …. in a globalized world, these international crises influence real estate even in such small and remote places like Canmore. Predictions on future market developments are dependent on multiple factors and become more and more challenging....

2021 - The Whopper Year of Canmore Real Estate

The title is giving it away…. 2021 was a record-breaking year in Real Estate in so many ways:

We have had positive numbers in every market segment and over every category except for one:

>  Lowest number of listings ever!

And that’s a real concern for the many buyers that have been trying to get a foot into the Canmore market but couldn’t. But let’s take a look at the sales numbers first and then look at listings at the end of this report when we cover the Outlook for 2022. 

The graph shows yearly sales numbers in Canmore since 2012 in blue and an impressive increase in sales numbers of 45% in 2021 over 2020. The orange curve reflects how the average price/sqft increased by 20% to $705/sqft over the last year.

A closer look at the years 2019 (the last year before Covid) until 2021 shows how sales came to a low point in April...

The unreal Recovery of the Canmore Real Estate Market in 2020

Welcome to 2020 – the year of Covid! When at the beginning of the year Covid started to appear on the horizon, nobody here in Canada or Europe was really taking it very serious. And I remember several discussions that I’ve had with friends and relatives about this topic. Having experienced SARS several years back when I was still living in China, I had quite a different opinion from most of my friends on how serious this could become for us.

In May of this year, we had seen the first lockdowns and the Real Estate Market reflected what was happening all over. Sales numbers in Canmore were down by 44% compared to 2019 and the future looked grim.

But then something happened and miraculously demand for Real Estate came back. By the end of December we had 658 sales, which is 27% more sales than in 2019.

The reasons for this are still not entirely clear to me, but here are some possible explanations:

 Essential Business:...

Is the Canmore Real Estate Market starting to recover?

The Canmore Real Estate Market – First quarter of 2020 and Outlook

The average Number of Listings in the first quarter of 2020 as compared to 2019 is up by 25%. However March listings are also up by only 25%. >>>> That’s in the average…..there is no further increase of listings as of now. (Note that there are 4 times as many hotel condos listed in the first quarter of 2020 then there were listed in 2019.)

The average List Price of the first quarter of 2020 over the same period in 2019 was up by 10%. The average list price for March was up 13%. >>>> We have not seen...

The Canmore Real Estate Market 2019

Dear friends of Canmore,

I am sitting here in my office looking out onto an absolutely stunning Winter wonderland with an incredible blue sky, crystal clear cold air and the sun turning everything bright and golden. What a joy and blessing to be able to live here!

Last year at this time I predicted that Canmore 2019 would see a “stable price level with no or very little price increase and perhaps some more supply”.

I was only partially right: Since 2010, the numbers of listings have been decreasing in Canmore and 2019 is the first year that sees this tendency turn around with a significant increase of supply over 2018 by 20% from 155 listings on average to 186 listings on average throughout the year. This turned only partially into 12% more properties sold in Canmore in 2019 than 2018 (518 Sales). However – average price/sqft above grade still increased by 7% (10% from 2017 to 2018) for the whole of Canmore. The numbers are very different...

New Mortgage Rules starting Jan. 2018

Starting January 1st, 2018 all mortgages will be required to qualify at the posted 5 year rate, or at this time approximately 4.89%. Currently mortgages with 20% or more can qualify at the regular 5 year rate of approximately 3%. The difference can reduce mortgage amounts by approximately 20%.

If you are interested in buying and have not been pre-approved for the new stress test, now might be the time to do so to find out, what the difference would be for you and if you should make a move before the deadline at the end of this year.

The Canmore Real Estate Market – Past, Present and Future

The decline of the price of crude oil which started internationally in August 2014 had a huge influence on the economy of Alberta and Calgary. While the price was previously at around $100US / barrel crude oil, the price dropped to its lowest at around $30 in February 2016 and has since started to recover to around $54 US in Dec. 2016.

Alberta’s economy which depends heavily on the oil industry has been hit with unemployment which lead to a negative net migration. People previously employed in the oil industry left Alberta and went back to their home provinces. The spending budget of many of those who stayed decreased sharply.

This development was also reflected in the Real Estate Market. With a lot of properties coming on the market but less people to look for properties, the Sales Volume in Calgary declined in Nov. 2016 by 3% year over year and was down by 17% when compared to long-term averages. Sales Prices decreased...

People have been stopping me on the street, asking what "I Champion Your interests!" is all about. Hear it from a spot by radio 106.5 Mountain FM, our local Canmore Radio Station: