Market Summary

2025 Kicks Off with Political Turbulence and Market Uncertainty

2025 is already shaping up to be an eventful year, with major political developments making waves and raising questions about the future of the market. The year began with newly elected U.S. President Donald Trump threatening a 25% tariff on all Canadian imports unless his demands for stricter border security against illegal immigration and drug smuggling were met. In response, the Canadian government committed to reinforcing border security, leading to a temporary 30-day pause on the proposed tariff. For now, things remain stable—but uncertainty looms.

What Do These Tariff Threats Mean for Canada?

While experts remain uncertain about the long-term impact due to a lack of precedent, some suggest that potential Canadian counter-tariffs on U.S. goods could help balance consumer costs. However, employment markets would likely need time to adjust to the evolving economic landscape.

Calgary’s Energy Sector: A Mixed Outlook

For Calgary, home to many of Canada’s leading oil and gas companies, the proposed tariffs initially included a 10% tax on energy exports. While this would have been a tough adjustment, industry experts indicated it would not lead to major job losses among large Canadian energy firms. This is partly due to the expected depreciation of the Canadian dollar in response to tariffs, which could offset some financial impacts since energy companies earn revenue in U.S. dollars while incurring expenses in Canadian currency.

For now, the real question is whether the tariff threat will re-emerge after the 30-day pause. Consumers and businesses alike should stay informed but not make any rash decisions unless directly affected by the policies.

Calgary Real Estate Market: What’s the Forecast?

Each January, the Calgary Real Estate Board (CREB) releases its annual market forecast, providing insights into expected trends. For 2025, CREB projects modest market growth of just under 3%, a slower pace compared to previous years. However, the number of total sales is expected to remain consistent with 2024 levels.

Key factors influencing this forecast include:

• Alberta’s GDP Growth: Expected to increase by 2.5% in 2025.
• Bank of Canada’s Rate Cuts: An estimated 0.75% reduction in the overnight lending rate.
• Population Growth: Calgary’s population is projected to rise by 3.1%, with over 96,000 international migrants and additional interprovincial newcomers seeking housing.

With these economic drivers in play, housing prices will likely continue their upward trend, though at a more moderate pace than in recent years.

January Market Recap: A Stabilizing Trend

January’s sales numbers brought a notable shift—after six months of declines, the average sales price held steady at $583,000, just $300 below December’s average. Additionally, sales activity picked up, aligning with seasonal expectations as the market gains momentum heading into spring.

Interestingly, Calgary has maintained a balanced market since September 2024, with inventory levels hovering around 2.5 months of supply. Historically, markets do not remain balanced for long, typically shifting into either a buyers’ or sellers’ market over time. This balance makes the current landscape unique and presents opportunities for both buyers and sellers.

What to Expect for Calgary’s Spring Market

Looking ahead, Calgary may trend toward a sellers’ market this spring, though not as intensely as in early 2024. A key indicator is the difference in inventory levels—Calgary had only 1.3 months of supply in January 2024 compared to 2.51 months this year. This suggests that buyers have more choices and may take their time before making decisions, rather than rushing to secure properties in a high-pressure market.

Last February marked the beginning of a rapid market acceleration—will we see that again? Only time will tell. However, the current outlook suggests 2025 will be an exciting year for Calgary real estate. If you haven’t had your home evaluated recently, now is a great time to do so and position yourself for the opportunities ahead.