Calgary home prices could dip $100,000 in two years, AI-driven study predicts

Home prices in Calgary could plummet over $100,000 in the coming years, suggests a new study.

Over the next two years, the decline will largely be due to increased supply and lower immigration, among other factors, according to the study, which used artificial intelligence to project prices in four major Canadian cities.

However, housing experts, including the study’s author Erkan Yonder, believe the forecast steep decline in median prices to be an improbable outcome.

“It’s less likely to see the worst-case scenario for Calgary. Is there a risk? Yes, there’s a risk,” said Yonder, an associate professor of real estate and finance at Montreal’s Concordia University.

He noted tariffs and other economic factors create more uncertainty, but in terms of immigration, developers are aware of government projections for the years to come.

“I don’t expect a sharp decline in the supply for Calgary, but recovery will be slower,” said Yonder.

The benchmark price of a detached home in Calgary was around $760,000 in July, down just 0.8 per cent from the year prior, according to the Calgary Real Estate Board.

The study predicts median prices sliding to $690,000 by the end of this year, declining even further — near $600,000 — under the most “aggressive” housing completion scenario by 2026 and into 2027.

Still, the study noted that prices will recover after the turn of the decade, stabilizing between $650,000 and $730,000 by 2032 , depending on how much supply comes online.

‘We need to take these findings with a grain of salt’

An expert from the University of Calgary called the study “quite comprehensive.”

“The housing market is so complex, and they try to really model the intervention of those shocks and the ultimate risks that they bring along,” said Sasha Tsenkova, a professor at the University of Calgary’s School of Architecture, Planning and Landscape.

However, even with the best of models, she notes that the housing market is very difficult to predict.

“We need to take these findings with a grain of salt,” Tsenkova said.

Upon seeing the study, John Hripko, a realtor with Royal LePage Benchmark in Calgary, called the slide in prices predicted in the study “totally fictitious.”

“There’s no substance to their logic, because they’re looking at it very microscopically,” Hripko said, noting the study’s connection of housing demand to international migration, but less-so inter-provincial migration.

In terms of housing crises, the projections would be “the worst ever experienced,” according to Hripko.

The 2008 financial crisis was an example raised by both Hripko and Tsenkova.

“Canada was safeguarded against major shifts in housing finance and housing markets. But that started in the mortgage markets in the US, and because of global exposure, it really skyrocketed impacts through many markets,” Tsenkova said.

As prices fell by as much as 30 per cent in some U.S. cities, brand new neighbourhoods and developments were demolished, effectively “shrinking to survive”, said Tsenkova.

Developers ‘don’t want to be stuck’ with unpurchased homes

In Canada, with mortgage debts among the highest in the world, even a five or 10 per cent decline in prices would have a “major impact,” she added.

“I’m not in the doom camp . . . it’s really difficult to predict at this point anything of that magnitude happening in the next five to 10 years,” Tsenkova said.

A surge in immigration to Calgary and other communities across Alberta in the past several years has driven up demand for housing, a demand that builders have been striving to meet .

More than double the number of new homes came online in the first quarter of 2025 compared to the first quarter of last year.

Hripko noted that developers in Calgary are most likely to keep pace with demand, rather than build more than required.

“They don’t randomly keep building because there’s no demand. Why would they? They don’t want to be stuck with the product,” he said, adding that larger developers can build elsewhere, in municipalities where demand is higher.

Yonder said, in the long run, to have a healthy housing market in Canada, more housing is needed.

He noted that supply is a problem across Canada, which needs to be addressed. The broader aim of the study was to find cheaper ways to build more housing.

“In the end, we want to see the potential trends and then we can react to them . . . that’s what we (are trying) to do here,” Yonder said.

swilhelm@postmedia.com