The Calgary real estate market has been on a steady climb over the past year. Now, with a recent lending rate adjustment, many are wondering what comes next. Whether you’re a homebuyer, investor, or seller, understanding the impact of this rate change is key to making smart decisions in 2025.
In this post, we’ll break it all down—no jargon, no fluff. Just clear, helpful information based on reliable sources like the Alberta Mortgage Brokers Association and recent market reports.
The Current State of Calgary’s Real Estate Market
To get a sense of where things are headed, let’s first look at where the Calgary market stands right now.
- Home Prices Are Still Rising
As of early 2025, the average price for a home in Calgary sits at around $612,800, which is up more than 5% compared to last year. Detached homes, which are always in high demand, now average over $800,000. - Sales Have Slowed Down (But Don’t Let That Fool You)
While prices are rising, the number of homes sold has dropped by about 19% year over year. That slowdown isn’t unusual when rates are uncertain, but it doesn’t mean people aren’t buying—there’s still plenty of competition in the market. - Inventory Levels Are Improving
After months of tight inventory, there’s been a 75% increase in homes for sale. More inventory gives buyers more choices, but there’s still a sense of urgency since supply is limited to about 2.4 months worth of listings.
What’s Happening With Interest Rates?
In early 2025, the Bank of Canada lowered policy rate (Overnight lending rate-which banks use to lend to one another) to 3.00%. This is the first real shift in rates after a period of holding steady. Now the policy rate has once again been adjusted by 25 basis points , As of March 12 2025 it sits at 2.75%, Why does that matter? Because interest rates directly affect how much you’ll pay to borrow money for a mortgage, most lenders are expected to drop their prime rate to 4.95% in the coming days.
*Disclaimer this does not mean this is your lending rate, you will have to add 2.25% to your overnight lending rate which brings lenders prime lending rate to 4.95% or more. *
When rates drop, mortgages get cheaper. Lower payments mean more people can afford to buy—and that increases competition for homes.
How the Rate Drop Could Affect Calgary Real Estate
Now, let’s talk about how this lending rate adjustment might shape the Calgary market over the next few months.
1. More Buyers Will Enter the Market
As borrowing costs decrease, more buyers are expected to jump in. Some were waiting on the sidelines for rates to fall, and now they’re ready to act. This means sellers may see quicker sales and possibly more offers per listing.
2. Prices Could Climb Higher
Increased demand often leads to higher prices. We’ve already seen Calgary home prices jump 14% in the last year. With cheaper financing options, that trend could continue—especially for detached homes and properties in sought-after neighborhoods.
3. Buyers Might Shift Their Focus
Affordability is still an issue for many, despite lower rates. Some buyers may turn their attention to more budget-friendly options like townhomes, duplexes, or condos. This could drive up prices in these segments too, as competition heats up.
4. The Market Might Stay Competitive Longer
Sellers are likely to benefit from more buyer interest, but buyers shouldn’t expect things to get easier anytime soon. Inventory is improving but remains tight. Homes in good condition and priced right are selling quickly. In some cases, bidding wars are back on the table.
What Buyers Should Keep in Mind
If you’re thinking about buying in Calgary, here’s what to consider:
- Act Quickly, But Don’t Panic
The market is active, but it’s important to do your homework. Get pre-approved for a mortgage so you know your budget, and work with a professional who understands Calgary’s market. - Look Beyond Detached Homes
Detached homes are great, but they’re not the only option. Calgary’s townhomes, duplexes, and condos offer value and can be easier to get into for first-time buyers. - Budget for Rising Prices
Even with lower rates, prices are still climbing. Make sure you’re comfortable with your monthly payments, not just today but years down the line.
What Sellers Should Expect
Sellers are in a strong position, especially if they have a well-maintained home in a desirable area. Here’s why:
- More Buyers Are Ready to Buy
Lower rates make it easier for buyers to qualify for bigger loans. That can lead to faster sales and better offers. - Pricing Strategically Is Key
While demand is high, buyers are still mindful of value. Homes priced right from the start tend to attract more attention and sell faster. - Be Prepared for a Quick Sale
If you list now, expect your home to sell faster than it might have a few months ago. Have your next move planned, whether that’s buying another home or renting temporarily.
What Industry Experts Are Saying
According to the Alberta Mortgage Brokers Association, rate changes like this often have an immediate effect on buyer behavior. Brokers are already seeing more inquiries from potential buyers looking to get pre-approved. Many expect this renewed interest to keep Calgary’s housing market competitive well into the summer of 2025.
Economists also point out that Calgary remains one of Canada’s most affordable major cities. Even with rising prices, it’s more attainable than markets like Toronto or Vancouver, which makes it attractive to both local buyers and those relocating from other provinces.
Final Thoughts
The recent lending rate adjustment is already making waves in Calgary’s real estate market. Whether you’re buying your first home, upsizing, or selling, the next few months could offer opportunities—but only if you’re prepared.
Ready to Take the Next Step?
If you’re thinking about buying or selling a home in Calgary, now’s the time to act. Speak with a local mortgage broker to understand your financing options, or connect with a Calgary real estate agent who can help you navigate today’s competitive market.
Our Mortgage Broker & Partner – Vishakha Bhargava (ProMortgages)
Need guidance? Reach out to a licensed Real estate Professional – Sukh Gill @ MyRealtorGiLL (CIR Realty)
Don’t wait for the market to pass you by—get started today!
