The Alberta residential real estate market in Q3 2024 demonstrated growth despite nuanced shifts in activity. With year-over-year sales down but quarter-over-quarter sales rising, the market remains as Alberta’s economic and population growth continues to influence real estate trends. Both Calgary and Edmonton markets showed unique rental price dynamics, while strong construction activity signalled sustained interest in property development.
Residential Summary for Q3
Sales
According to an Edge Realty Analytics report, Alberta experienced a 2.5% increase in sales from Q2 2024, though sales were down by 2.9% compared to Q3 2023.
Listings
New listings saw an 11.7% rise from the previous quarter and a 9.8% increase year-over-year, indicating an influx of new properties onto the market. The active listings followed suit, climbing by 6.0% quarter-over-quarter and a slight 0.2% year-over-year.
Prices
The average price of homes in Alberta rose by 1.1% from Q2, and by a robust 6.7% over the past year.
Months of Inventory
The months of inventory—a measure indicating how long it would take to deplete current listings given the current rate of sales—rose modestly from 2.4 months in Q2 to 2.6 months in Q3. This slight increase represents a minor easing in demand relative to available supply.
Sales-to-New Listings Ratio
The sales-to-new listings ratio dropped from 73.8% in Q2 to 67.6% in Q3 2024. This decline points to a more moderate absorption rate, reflecting a more balanced or slightly buyer-favoured market compared to earlier in the year.
Construction
New construction remains robust, with properties under construction rising by 4.0% over the previous quarter and by 10.7% year-over-year. This growth indicates ongoing confidence in Alberta’s real estate market, as developers continue to bring new supply to meet evolving demands.
Economic Indicators
Population Growth
Alberta’s population growth remains consistent, with a 1.0% increase over Q2 2024 and a 4.4% rise year-over-year. Steady population growth is a significant driver for housing demand, including in the rental and multifamily sectors.
Unemployment Rate
The unemployment rate in Alberta increased slightly from 7.1% in Q2 to 7.5% in Q3 2024, reflecting broader economic challenges. This uptick could impact both purchasing power and rental demand, particularly in sectors dependent on consumer spending. As of October, the overall unemployment rate for Canada was 6.5%.
Mortgage Arrears
Mortgage arrears improved slightly, falling from 0.31% in Q2 to 0.30% in Q3. This reduction in arrears suggests stable homeowner finances despite recent economic shifts.
Rental Market in October
According to Rentals.ca, Calgary’s rental market witnessed slight declines in October. The average rent for a one-bedroom apartment fell by 0.9% month-over-month to $1,692, a 2.2% decrease year-over-year. Two-bedroom units also saw a 0.9% monthly drop, bringing the average rent to $2,074, a 4.9% decrease from the previous year.
In Edmonton, rental prices rose in October. One-bedroom apartments increased by 2.3% month-over-month to $1,408, marking a significant 10.1% rise year-over-year. Two-bedroom units followed with a 0.8% monthly increase, reaching $1,717, for an 8.7% jump from Q3 2023.
Industrial Summary for Q3 2024
In Q3 2024, Edmonton’s industrial market maintained balance, with availability decreasing to 5.2%, marking a ten-quarter equilibrium streak, according to the CBRE. Net absorption was strongest in the Northwest submarket, accounting for 306,000 square feet, largely driven by several large-scale transactions. The overall market showed solid performance with sublease space representing 16.4% of the available inventory, a notable figure for the sector.
In Calgary, the industrial sector saw 1.4 million square feet of positive net absorption, primarily supported by the delivery of 1.1 million square feet of new space, which was 69% pre-leased. Calgary’s large-bay spaces, however, faced rising vacancy, with sublease space reaching 24% of total availability, signalling recalibrations among major tenants.
Office Summary for Q3 2024
Edmonton’s overall office vacancy rate decreased by 50 basis points in Q3 2024, according to the CBRE, reaching 20.1%, the lowest level since Q3 2020. Downtown Edmonton saw its vacancy rate fall to 21.4%, reflecting a year-over-year decline of 250 basis points. The suburban market posted similar gains, with vacancies decreasing to 18%, partly driven by government sector demand. Sublease space as a percentage of overall vacancy decreased by 160 basis points year-over-year to 7.6%.
In Calgary, the office market was divided into suburban and downtown sectors, showing contrasting trends. In the suburbs, there were 132,000 square feet of positive net absorption in Q3, bringing year-to-date absorption to 370,000 square feet. Downtown Calgary, however, experienced negative net absorption for the third consecutive quarter.
Sublease availability rose notably due to Suncor Energy listing 188,000 sq. ft. of sublease space; however, the City of Calgary’s expanded Downtown Development Incentive Program aims to eliminate up to 700,000 sq. ft. of vacant office space. Overall rental rates have risen due to high demand for Class AA properties and the removal of lower-rate buildings through conversions.
Retail Summary for the First Half of 2024
The CBRE reported that for the first half of 2024, Edmonton’s retail sector saw vacancy rates decline to 5.3%, the lowest level since 2019. Vacancy dropped in the Central Business District and Northeast submarkets, with mixed-use properties benefiting from increased demand driven by U.S.-based franchises. Calgary’s retail sector also recorded heightened demand during this period, with vacancy rates down for a second consecutive half-year period. Rising rents reflected competition for prime spaces, with retail leasing momentum fueled by demand from restaurant groups and childcare businesses, especially in suburban areas where mixed-use developments are gaining traction.