Where's Hot and Where's Not: A Look at Canada's Condo Apartment Markets in 2023

Calgary's Real Estate Market Sizzles While Montreal's Cools Off

In the ever-dynamic landscape of Canada's real estate market, condo apartments are making waves in two major cities – Calgary and Montreal. 2023 has brought contrasting fortunes to these cities, with one witnessing a scorching rise in demand, while the other experiences a cooling trend in buyer interest.

Calgary's Condo Apartment Market Heats Up

Calgary's real estate scene is ablaze with activity, as the city's condo apartment market experiences a surge in demand and construction. Housing starts in this metropolitan hub are soaring, indicating robust pre-sales.

Notably, an impressive 43% of new housing starts are attributed to condo apartments, with an astounding 4,191 units recorded year-to-date. The construction frenzy is undeniable, with over 20,000 homes currently under construction in Metro Calgary. Among these, a significant 62% (13,000 units) are dedicated to apartment condos.

Driving this fervor is an unprecedented influx of buyers. The number of existing condos purchased this year has surpassed levels witnessed in the past three years, propelling steady price gains throughout 2023.

However, the market is grappling with a challenge – the supply of active listings and completed constructions is struggling to meet the surging demand.

Alberta Net Migration

Interestingly, while net migration is likely fuelling rental demand, there is anecdotal evidence points to a notable portion of this demand originating from out-of-province condo rental investors and corporate investors, further fueling the city's red-hot market. Without a doubt, Calgary's condo apartment market is firing on all cylinders and shows no signs of cooling down.

Montreal's Condo Apartment Market Cools Off

In stark contrast to Calgary's sizzling market, Montreal's condo apartment sector is experiencing a noticeable cooldown. Buyer interest in existing apartments has taken a dip, with the number of purchases falling below the levels of the past three years.

This downturn is mirrored in housing starts, which have clocked in at less than half of the figures seen in the previous three years. These trends collectively suggest a dramatic slowdown in pre-construction sales activity.

The equilibrium of the Montreal market is evident in its condo apartment prices, which are currently holding steady. However, the balance of power has shifted towards buyers, granting them greater negotiating leverage. This dynamic unfolds against a backdrop of high mortgage rates, which are limiting buying budgets for prospective homeowners.

Montreal has had similar population growth to Alberta, but perhaps it is viewed as “less investor friendly” or perhaps more accurately Quebec tenancy laws are viewed as ‘friendlier to renters’ than other provinces.

Quebec Net Migration

Adapted from Statistics Canada, Table 17-10-0020-01 (Interprovincial migrants, Canada, provinces and territories) and 17-10-0040-01 (International migration components, Canada, provinces and territories).

As we move into the latter half of 2023, market experts predict a downward trajectory for Montreal apartment values. The anticipated drop is seen as a reflection of the shifting market dynamics and the constraints posed by mortgage rate fluctuations.

Other Markets are in Flux

The tale of Canada's condo apartment markets in 2023 is one of stark contrasts. While Calgary's market blazes with unprecedented demand and construction activity, Montreal's market faces cooling buyer interest and a challenging landscape.

These divergent trends paint a vivid picture of the dynamism inherent in Canada's real estate sector and the illustrate why predictions for a “Canadian real estate market” rarely hold true. Other Canadian condo markets are in flux, falling somewhere between Calgary and Montreal. Some will break out and while others will be pulled down by soggy economic news and high mortgage rates.

For all your real estate market updates and insights, stay tuned with us. We're here to keep you informed about the ever-changing landscape of Canada's property markets.