As 2022 comes to a close and we spend the holiday season with family and friends, our real estate team has reflected on our busy year. This year we were blessed to work with over 40 clients to buy, sell and list their properties worth $28.5 million dollars. Thank you for your support and business in 2022!
Residential Market Update:
Let’s talk about the biggest news story in real estate these days – interest rate increases! On December 7th, the Bank of Canada took their seventh consecutive increase by 0.5% putting the lending rate at 4.25% and bringing the new prime rate to 6.45%. We haven’t seen rate increases like this for over 15 years and we are expected to receive another interest rate hike in early 2023. “Higher lending rates are impacting the purchasers buying power and limited supply choice in the lower price ranges of the detached market is likely causing many purchasers to place buying decisions on hold” said CREB® Chief Economist Anne-Marie Lurie.
The good news for the real estate market is that the migration into Alberta continues. The population has grown by more than 100,000 people to 4,543,111 since September 2021. This migration is putting pressure on the rental market with inventory levels well below the same time as last year and thus, rent prices are climbing. The affordability of housing compared to other major cities in Canada, along with the opportunity for jobs and no provincial sales tax is continuing to keep Alberta as a draw for people to move to.
The slowdown in sales over the past six months was not enough to erase the gains from earlier in the year. Year to date sales remain nearly 10% above last year’s record high. So all in all, a strong year in real estate for Alberta.
If Sellers want to sell in the coming months, they will need to have a compelling price for Buyers. If there is a time for Buyers to take advantage of lowering price points, it will likely be in December, January and February as markets move into balanced and in some cases, buyer markets. We can anticipate sales to increase from February through Spring if the listing inventory stays adequate to meet demand. Without enough inventory, we may see lower sales numbers for longer which will keep more competitive conditions in the market and pretty solid prices.
With the anticipated population growth through migration, the rental market becoming super tight, sales remaining strong and low inventory levels, it is setting up for a competitive Spring Market in the New Year. Overall, from TD’s report, Alberta is expected to see the smallest decline this year for sales at about 2%, but real estate sales in Canada are forecast to drop about 22% next year. Price gains are expected to be the second lowest among all provinces this year at 3%, and then potentially declining 7% in 2023. Yet TD expects Alberta prices to recover in 2024, growing about 5%, which will put us on par with today’s price points.
Farmland Market Update:
According to Farm Credit Canada, Alberta farmland increased at a more moderate pace of 5.9% for the first six months of 2022 for dryland only. There’s little doubt that higher borrowing costs will moderate the demand for farmland. However, farmland supply is very limited, which combined with farm income continuing to trend in the right direction, could offset the impact of these interest rate increases. There are Alberta Ag producers with cash reserves ready and waiting to invest in land when it comes available. We can’t wait to revisit these factors in early 2023 when the full report is released.
“Producers are still making strategic investments in their operations and buying farmland, which is in short supply and high demand. This healthy farmland market is a good indication there is confidence and optimism in the future of the industry among producers,” J.P. Gervais, FCC’s chief economist says.
Smith & Griffith Family Update
Keeping with tradition, here is a little update on our family. McKenzie is halfway through her law degree at University of Calgary, enjoyed working as a summer student for Fasken and loved her backpacking trip through France this summer. Cassidy graduated with her Bachelor of Applied Science Degree in Agribusiness and has joined our team at Smith & Griffith as an unlicensed Real Estate Assistant. We have enjoyed working with Cass, bringing a new level of customer service to our business, and watching her continue to compete in barrel racing. Matt is finishing his fourth year at Maryville University in St Louis and will graduate this coming Spring with his Bachelor’s in Business Administration with a major in finance. We were grateful to be able to travel again and watch his lacrosse team play in St. Louis. Kirsten is working in the service industry in Calgary and part time with the Calgary Stampede in the logistics department. Kirsten has enjoyed living on her own and spending time with friends at music venues like Country Thunder and the Calgary Stampede. Dawson spent his third summer working at Crossroads Gas Coop and will graduate this spring with his Agri Commerce Diploma from Olds College. We are very proud of our kids and have enjoyed the moments we can all be together as a family.
Thank you for your support, business and well wishes over this past year. Our business is growing because of referrals from clients and friends like you and we thank you for your thoughtfulness in passing on our name. We’d love to assist others, so please don’t hesitate to send your friends and family our way. We promise to provide them with great service!
From our family to yours, wishing you the timeless treasures of Christmas, the warmth of home, the love of family and the company of good friends!
Merry Christmas and Happy New Year!
Rees, Kari & Cassidy
“Opening Gates To The Country And Doors To The City”