DECLINING PRICES, INTEREST RATES IMPROVE HOUSING AFFORDABILITY

Conditions for buyers are largely improving across Canada, including in Calgary, where a new survey points to lower prices and falling mortgage rates boosting purchasing power. Ratehub.ca released its monthly affordability report , finding improvement from August to September in 10 of the 13 major markets it tracks.

Notably, Calgary saw the third most substantial improvement in average price, monthly mortgage payment and income required to qualify under the federal stress test rules.

“The biggest impact, though, was on the price side,” says Penelope Graham, mortgage expert with Ratehub.ca.

The average price of a home in Calgary decreased by $4,700 from August to September to reach $567,900. That’s the third largest month-over-month decline among markets, trailing only Canada’s two largest markets.

Toronto topped the list with a decline of $9,400 to reach an average price in September of $960,300. In Vancouver, the cost fell $8,300 to about $1.14 million for the average cost of a home.

The price decline in Calgary was the key driver behind the decrease in the average monthly mortgage payment of $2,908, a drop of $30 from the previous month.

Falling prices also lowered the amount of income to qualify under the federal stress test. It fell $1,100 to $123,200 in September from August to qualify for a rate of 6.47 per cent. That is a slight drop from August when the rate was 6.49 per cent. Both rates are two full percentage points above the posted mortgage rates for a five-year fixed rate used in the study. Borrowers must qualify at that highest threshold to ensure they can afford to pay their mortgage if interest rates rise.

As well, Ratehub.ca calculated income requirements and mortgage payments based on a 10 per cent down payment.

Graham notes that the drop in price and rates “did not really move the affordability dial” for those most affected by affordability challenges, first-time buyers.

Yet the study does point to a shift in Calgary’s resale real estate market, she adds.

“Calgary had been a seller’s market for quite some time, which started to unwind over the past couple of months,” she says. “That sales-to-new-listings ratio actually dropped” nearly nine percentage points in September. Calgary Real Estate Board statistics from Sept. 30 show the metric was 45 per cent, indicating a market with a balance between supply and demand. Yet the market has been trending toward favouring buyers as the ratio moves closer to 40 per cent, the threshold between a balanced and a buyer’s market, Graham says.

“As well, supply is over four months, the highest since early 2020,” she says. “That reduces the edge sellers had, and buyers have more negotiation room.”

Overall, the news is favourable for first-time buyers — though limited, says Calgary mortgage broker Cassia Miller, Alberta vice-president for Ratehub.ca.

“It’s not a significant change,” she says, noting the $30 reduction overall in average monthly cost.

She notes the additional cut by the Bank of Canada this month could be another boost, though that reduction is likely already priced into fixed rate mortgages. Miller notes their interest rates are largely determined by the bond market, which often moves in anticipation of central bank moves, among other economic factors.

Miller adds that as of late October rates had already moved, with the lowest for a five-year fixed rate at about 3.79 per cent.

“That increases your purchasing power by about $25,000” based on the average price in Calgary, she says, noting that could help some first-time buyers.

Yet for the market to see significant growth, the Bank of Canada would likely need to cut rates more, Graham says.

“If the overnight lending rate went to two per cent, which we haven’t seen since 2022, that would still be” higher than during the pandemic.

2025-11-06T18:04:42Z