Coles Real Estate Market Update - March

Calgary's housing market is anticipated to experience moderated growth in the upcoming months of 2025, influenced by factors such as easing lending rates, improved housing supply, and sustained population and employment gains.

Sales Activity and Demand

The Calgary Real Estate Board (CREB®) forecasts that housing demand will remain robust, with sales expected to surpass 26,000 units in 2025—over 20% higher than long-term trends. However, slowing migration and increased competition from new home constructions may temper growth in resale activity. 

Market Conditions and Pricing

The market is projected to transition toward balanced conditions, with price growth moderating to an anticipated annual gain of approximately 3%. Variations in price growth are expected across different market segments, as new home competition impacts certain sectors of the resale market. 

Inventory Levels

As of January 2025, inventory levels have risen from extreme lows to levels not seen in nearly two years, providing buyers with more options and a less stressful purchasing process. This increase in supply is expected to contribute to a more balanced market in the coming months. 

Interest Rates and Affordability

The Bank of Canada's recent reduction of its policy interest rate by 25 basis points to 3.00% in January 2025 marks the fifth consecutive cut aimed at stimulating the economy. Lower borrowing costs are anticipated to attract more buyers to the market, enhancing affordability and potentially spurring increased housing demand. 

Economic Risks

While the housing market is expected to be more balanced than in recent years, significant economic risks—such as potential tariffs—could impact activity. These risks will be crucial to monitor as they may influence consumer confidence and market dynamics throughout 2025. 
​As of mid-March 2025, Calgary's economy has experienced notable shifts influenced by recent U.S. tariffs and evolving market dynamics.​

Economic Overview

-Impact of U.S. Tariffs
On February 1, 2025, the U.S. government enacted a 25% tariff on most Canadian goods and a 10% tariff on Canadian energy exports. Calgary Economic Development expressed concerns that these measures could disrupt supply chains, increase business costs, and threaten investments and jobs in Calgary and across Alberta. ​

The Calgary Chamber of Commerce emphasized the potential risks to key industries, including energy, manufacturing, and agriculture. They cautioned against retaliatory measures, suggesting that such actions could further destabilize the economy and undermine Canada's reputation as a reliable trading partner. ​

-Real Estate Market
In January 2025, Calgary's housing market showed signs of adjusting to these economic pressures. The Calgary Real Estate Board (CREB®) reported a 70% year-over-year increase in inventory levels, rising to 3,639 units. Despite this surge, inventory levels remain below the typical January figures of over 4,000 units. Sales activity experienced a 12% decline compared to the previous year, yet remained nearly 30% higher than long-term averages. The total residential benchmark price in January was $583,000, reflecting a nearly 3% increase from the same period last year.

-Industry Responses
Major players in Calgary's energy sector have responded to the tariff challenges with strategic adjustments. Suncor Energy's CEO, Rich Kruger, highlighted the company's integrated structure, noting that approximately 60%-65% of Suncor’s production remains in Canada. This positioning provides a "natural hedge" against U.S. tariffs, as the company is less reliant on U.S. refineries. ​
Similarly, Imperial Oil has projected an increase in crude oil production for 2025, driven by boosted output from its oil sands assets in Alberta. The company forecasts production to range between 433,000 to 456,000 barrels of oil equivalent per day, up from the 420,000 to 442,000 bpd forecasted for 2024.

Calgary's economy is navigating a complex landscape marked by external trade pressures and internal market adjustments. Although Calgary's housing market is projected to maintain strength in the coming months, with moderated price growth, increased inventory, and favourable borrowing conditions contributing to a more balanced and sustainable market environment.