Calgary Real Estate Market Remains Hot: Inflation Delays, Mortgage Rates, Ginkgo MIC's 9% Return, and LCBO Strikes
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Calgary has become Canada's hottest real estate market, driven by demand from new Canadians and its relative affordability. With 65% of newcomers planning to buy their first home within the next two years, Calgary's lower housing prices compared to Toronto and Vancouver make it an attractive option. This article explores the latest updates and trends in Calgary's real estate, including the impact of inflation and mortgage rates, alternative investment opportunities, and labor strikes.
Overview of Current Calgary Housing Trends
Market Snapshot:
➀ Median Sale Price: The median sale price for townhouses and row units increased by 21.6% year-over-year, reaching $450,000 in Q1 2024.
➁ Detached Houses: Detached houses remain affordable, with prices ranging between $500,000 and $700,000.
➂ Interprovincial Buyers: There is a growing trend of interprovincial buyers purchasing homes without seeing them in person.
Fig: Inflation Measures and Housing Costs( June 2023- May 2023)
Why It Matters:
1️⃣Economic Opportunities: Calgary's job market and lifestyle attract new Canadians.
2️⃣Affordability: Calgary is more affordable compared to other major Canadian cities.
3️⃣Competitive Market: The steadily increasing property values make Calgary a seller's market.
Recent Inflation May Delay Expected Rate Cuts Until September:
May's consumer price index (CPI) rose 2.9%, surpassing the 2.6% estimate. This unexpected increase, alongside the Bank of Canada's core inflation measures averaging 2.85% (above the 2.7% forecast), suggests stronger-than-expected inflation.
Key Points:
- Housing Costs: Mortgage interest costs soared 23.3% year-over-year; rent increased by 8.9%.
- Grocery Prices: Rose 1.5% year-over-year, the first acceleration since June 2023.
With the next rate decision on July 24, analysts predict a possible delay in rate cuts until September to manage inflation without harming economic growth. Persistently high inflation affects consumer spending and economic stability.
Fig: Calgary Housing Market Trends (Q1 2024)
The Influence of Mortgage Rates on Calgary Home Prices
Understanding current mortgage rates is crucial for anyone looking to purchase a home or refinance an existing mortgage. Mortgage rates significantly impact the affordability of a home, as even small changes in interest rates can lead to substantial differences in monthly payments and overall cost. By staying informed about the latest rates, potential homebuyers and homeowners can make better financial decisions, lock in favorable terms, and optimize their borrowing strategies. With the Bank of Canada's next rate decision approaching on July 24, 2024, now is a critical time to review current rates and assess your mortgage options.
Understanding the Potential Returns of Ginkgo MIC Investments
As the Calgary real estate market navigates the challenges posed by inflation and rising mortgage rates, alternative investment opportunities have garnered attention from savvy investors. One such opportunity is the Ginkgo Mortgage Investment Corporation (Ginkgo MIC), which offers the potential for attractive returns.
Ginkgo Mortgage Investment Corporation is an established, Canada-wide alternative lender helping borrowers solve tough financial problems, while offering investors steady financial growth through high-yielding mortgages. Their vision is to be a prominent leader of the private mortgage industry by providing comprehensive solutions to all stakeholders.
Highlights:
- Investment in a diversified portfolio of secured mortgages (majority residential)
- Target return 8-10%, distributed monthly
- Never miss any monthly distribution since inception in 2011
- Total accumulated distribution made to investors over CA$51M
Evaluating the Impact of LCBO Strikes on Calgary Property Investment
The recent labor strikes at the Liquor Control Board of Ontario (LCBO) have garnered attention not only in Ontario but also in other provinces, including Alberta. Employees have been negotiating over wages, benefits, and working conditions. This strike has led to a disruption in the supply of alcoholic beverages in Ontario, impacting consumers and businesses that rely on LCBO products.
Investors in the Calgary real estate market should stay informed about labor relations in various industries and consider the potential risks associated with labor disputes when evaluating investment opportunities.
Conclusion:
Calgary's real estate market is thriving, driven by affordability and economic opportunities, despite challenges like inflation and rising mortgage rates. As prices soar and demand remains strong, understanding these dynamics is crucial for making informed investment decisions in a competitive market.
Sources:
- Calgary Real Estate Board (CREB):https://www.creb.com/
- Bank of Canada: https://www.bank-banque-canada.ca/
- Ginkgo MIC: https://ginkgomic.com/
Disclaimer: The content above is a compilation from diverse reliable online sources, including blogs and news articles. The Dolphy content team does not ensure the factual accuracy of the information. The provided information may be outdated, and it should not be considered as advice or a recommendation. It is advisable to consult with a licensed real estate agent or broker for accurate advice and recommendations.
