For the third month in a row, Calgary saw a decline in house prices — but supply levels have also tightened as fewer homes go on the market, according to a new survey.
The latest report from the Calgary Real Estate Board (CREB) shows sales activity remained fairly steady in August as more people sought affordable homes.
Overall, inventory trended downwards and there are now fewer options for anyone who is not in the market for an expensive home.
"We are seeing some differing trends when we look at more affordable product versus some more higher-priced product," said chief economist Ann-Marie Lurie.
"Detached is where most of the adjustment is occurring. However, there isn't really a lot of supply in the lower end of the detached market, so that market is still relatively tight."
Benchmark prices went down to $531,800, which is still 11 per cent higher than this time last year, the board's report says.
While sales slowed down for detached homes, Lurie said interest rate hikes are forcing people to look for something different.
"It's why we're seeing such strong growth in apartments and condominiums, we're seeing them in row properties, even semi-detached to some extent. And I think the reality is, as we move forward, further rate increases are expected and that's going to have a cooling effect on demand."
For apartments and condominiums, there is a 65 per cent increase in sales compared to last year. But the supply gap is narrowing as the amount of new listings is not meeting the demand.
The semi-detached market also saw a reduction in new listings, according to CREB, with prices going down in the short term but remaining 10 per cent higher than last year. Row homes are also in high demand with higher sales numbers than last year, and prices remaining 14 per cent higher as well.
Outside of Calgary, housing markets in Airdrie, Cochrane and Okotoks are experiencing similar trends, but Lurie said they are all approaching a more balanced market in the months to come.