In this week’s EconMinute, we’re talking about price of condominiums in Canada’s biggest cities.
Canada is grappling with a housing crisis as demand continues to outstrip supply. With strong in-migration from other provinces and across the world, this is playing out in Alberta as well. However, digging into the market for condos specifically, we uncover an interesting story: condo prices in Calgary and Edmonton are actually below their value as of 2017.
To assess the condo market, we used a measure called the New Condominium Apartment Price Index (NCAPI). This index measures how prices for newly built condos change over time. For a fair comparison, it looks at similar units in terms of square footage.
From the beginning of the time series (2017), Alberta and the rest of Canada have been trending differently: prices were declining in cities in Alberta while they were increasing elsewhere in Canada. This divergence continued throughout the pandemic when prices rose even further elsewhere but held steady in Alberta. Fast forward to today, we’re seeing a new trend: in most cities, prices are levelling out, but in Alberta, things are taking a different turn. Condo prices are on the rise.
- In 2018, condo prices, as measured by the NCAPI, rose by 4% across Canada’s major cities but dipped by 4% in Calgary and by 1.4% in Edmonton.
- By 2020, condo prices were up 17% across these major cities (compared with 2017) but fell even further in Calgary and Edmonton—down 22% and 11% respectively.
- Since April of 2022, condo prices have stopped rising across Canada whereas in Calgary and Edmonton prices have started to rise.
- Although Calgary and Edmonton are starting to see prices rise, prices in Calgary remain 13% below the 2017 index, and in Edmonton they are 10% below.
As the housing market tightens in Alberta, the price of new condos in Alberta’s biggest cities is likely to rise. An influx of people relocating to Alberta and rising housing costs will likely drive interest in more affordable condo options.
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