For the third quarter in a row, sales reached new record highs. Most of the gains in the first quarter were driven by exceptionally strong detached home sales.
While low interest rates have been driving much of the growth in housing demand, Airdrie also benefits from its relative affordability compared to Calgary. This relative affordability and the growing services and businesses within the city are contributing to significant growth in population.
Over the 2019-20 measurement period, Airdrie’s population topped 75,000 people, a four per cent improvement over the previous year. A potential shift towards more permanent flexible work arrangements could support housing demand growth in the city.
The exceptionally strong sales that started in the second half of last year have outpaced any growth in new listings, as inventory levels are well below levels recorded over the past six years. COVID-19 also impacted the new-home construction sector last year, limiting potential supply pressure coming from that segment of the market.
Strong demand and lower inventory levels have contributed to a steady decline in the months of supply. In the first quarter, the months of supply averaged less than two months, which is tighter than anything seen last year. This is well below historical averages and nearly as tight as levels seen in 2014.
Persistent sellers’ market conditions are contributing to gains in home prices. Total residential prices have risen over the past three quarters, with the strongest quarterly gain occurring in the first quarter of this year.
This has caused the first-quarter benchmark price to rise above $350,000, nearly seven per cent higher than last year. The gains were even stronger in the detached sector, which improved by over eight per cent compared to last year for a quarterly price of $391,733.
The recent gains in prices have narrowed the gap between the previous record-high prices, as detached home prices in the first quarter were only one per cent lower than the high levels reported in 2014.