Bow Valley Real Estate Market Trends in 2021 and why Canmore Prices Keep Going up

By Robin Tuck

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Approx read time: 10 minutes

A changing real estate landscape in Banff and Canmore

Covid-19 has changed our lives in many ways, but one of the biggest changes we’re seeing around the world is in real estate. Covid has affected our spending habits, our priorities, our outlook on life, our location preferences and more, and all of these factors have had a huge effect on our real estate requirements, and perhaps more importantly, on demand for certain types of property.

There is a lot of talk of unstable markets across Canada, as prices continue to soar up and up. You can’t mention Canadian real estate right now without someone throwing in a quick warning about ‘bubbles’. But what do the fundamentals say? Is there anything other than short term pressure on demand at play? Are there long term changes in demand that could be leading to permanent price adjustments in Banff and Canmore?

I would argue that yes, there are certainly short term pressures on the market that may need to correct in due course, however, and perhaps more importantly, there are also other big factors at play that are likely to forever shift the demand curve for mountain real estate and permanently move prices upwards.

In this blog post, we’ll first take a look at the most recent data on price changes in the Bow Valley (Canmore in particular). Next we’ll discuss short term factors affecting supply and demand in the Bow Valley in 2021, and the effect I believe this is having on prices. And then finally, we’ll look at the longer term factors that are causing permanent changes to mountain real estate as we know it and what that means for the market moving forwards. It’s a long blog post, but hopefully there are some useful insights that can paint a clearer picture of what exactly is going on right now.

So before we dive into the reasons causing the price shifts in the market. Let’s talk numbers:


This blog post is merely an expression of my personal opinions and is not intended as investment advice. Please consult your financial advisor and do your own research before making any investment decisions.

Market Statistics

Why specifically Canmore?

So for the most part, when we talk about crazy numbers in the mountains, we’re generally talking about Canmore and Dead Man’s Flats. Banff is somewhat exempt from crazy short term market fluctuations because of the challenges involved with owning property (the ‘need to reside’ clause, for example – read a full explanation of how that works, here). So with Banff being its own unique market, Canmore is probably the most useful market to explore in this post.

So let’s talk Canmore numbers to get a good sense of what’s happening in the market. Check out the graphs below for a glimpse of what’s been going on during the past 12 months.

Graphs are taken from Pillar9 statistics. April stats have yet to be released.

Now that you’ve had a brief look at the data, let’s dissect what we can see here.

  1. At the beginning of last year, there was a steady increase of supply, which is likely to be explained by a slight glut of people trying to sell after losing their jobs, save money etc., and a reduction in buying demand (people were too scared to look at houses). This was followed by a typically slow winter (nobody likes moving in winter), followed by an absolutely crazy spring. As you can see, the inventory available in Canmore has fallen from 260-270 properties, down to just over 100. What does this mean? Reduced supply means price increases and a move into a seller’s market. Finding new homes to buy is proving to be increasingly difficult for buyers.
  2. Prices have rapidly increased over the same period, from a low point in August 2020 to a high point right now. This is almost a proportional increase that reflects the reduction in supply. Restricted supply is likely to only play part of the role however.
  3. Number of sales have massively increased since the same time last year. In summary, houses are flying off the shelves.

And if we look at the sales by price range, going back to 2018, the picture of what’s happening gets even clearer.

Sales by price range

Over the past 4 years, you’ll notice a gradual shift from the majority of homes being sold in the $300-399 range, to the majority of homes being sold in the $700k-$1M range. Clearly there’s been some price appreciation that’s pushed some properties into higher price territory. Affordability also increases as interest rates decrease. Probably the most striking thing that you’ll notice though is just how many properties are being bought and sold in 2021 vs previous years.

It’s probably fair to say that taking an average of 2020 and 2021 is a more realistic view of property sales over the past 2 years though, because a large proportion of the 2020 demand was shifted to 2021. After taking average sales into account, it’s clear that the lower priced properties are selling at roughly the same rate or less, compared to 2019, but the more expensive properties($600k+) are selling in above average quantities. This speaks to the idea that there are simply more higher priced properties in Canmore now than cheaper properties, as well as to the increased affordability of higher priced properties.

Finally, let’s take a look at the last piece of the puzzle, which is analysing the types of properties that have been selling this year compared to the past ten years:

Increased condo sales

What you’ll see is that the biggest change is overwhelmingly an increase in apartments being sold. Part of this is likely to be due to a large increase in condo developments over the past few years, and a general increase in proportionate supply in the market, but there are also economic factors too.

Condos and apartments tend to be the most affordable properties in the housing market. As a result, the recent wave of low interest rates, increased disposable income, a year of savings and first time buyer incentives is likely to have pushed a whole swathe of lower income individuals into a position where they can now enter the lower end of the condo market. Let’s not also forget that some of the condo owners from previous years are now probably selling their homes and upgrading, meaning more condos are available for new buyers.

So we’ve touched on a few reasons that are likely to be causing a squeeze on supply and an increase in demand for Bow Valley properties, but what other factors are at play in the market right now? In my mind, there are two types of forces at play here; temporary ‘bubble inducing’ factors, and longer term stable market growth factors.

Demand side factors that may be causing a temporary price shift

Low interest rates

I’ve already touched on this briefly, but historically low interest rates could definitely be causing a surge of buyer interest. Borrowing money has never been cheaper, and as a result, we’re able to afford more. This means higher price brackets have become more competitive spaces and there’s upward pressure on prices above $600k. Similarly, as I just mentioned above, people that couldn’t afford lower cost housing before can now enter the property market, putting upward pressure on lower priced properties too.

So overall, low interest rates are causing an intense buying spree, because everyone is trying to buy before the rates go up. Everyone knows that the government is discussing a rate increase to reduce pressure on the Canadian housing market prices, but you might argue that the threat of an increase is arguably causing even more pressure in the short term.

The major risk I see with this temporary low interest rate is that the interest rates might suddenly go up a few percent, causing all this pressure on demand to suddenly evaporate. This could potentially cause prices to plateau or even fall if the effect on affordability is severe enough.

Pent up demand

There is definitely pent up demand in the housing market. For the best part of a year, many of us have barely dared to venture outside. Many of us have also spent the past year cooped up with our relatives.

As a result, few people have felt safe enough to look at houses until very recently. In short, we’ve been too focused on just getting through Covid to think about buying houses.

But now that vaccines are rolling out and we’re starting to see the light at the end of the tunnel, it’s clear that people are feeling ready to buy. We’re sick of living on top of each other, spring is just around the corner, and Covid has gradually become normalised. In short, we’re feeling good about getting out there and looking at houses, but it just so happens that we’re all coming out of hibernation at the same time. There are a year’s worth of people that would have bought a house but have chosen to wait until now.

The obvious result; increased demand and upward pressure on prices.

Reduced Supply

Don’t forget though, there’s also pent up supply, which is also causing upward pressure on prices. There are still plenty of people that would like to sell their homes but don’t want to risk have strangers coming into their homes with Covid. There are plenty of pundits expecting a flood of properties onto the market as soon as covid is back under control.

A sudden influx of property onto the market in a post covid world could very possibly cause downward pressure on pricing. But conversely, in the current situation, it’s the opposite. With the rate of properties entering the market being throttled back by wary sellers, it’s also creating an upward pressure on prices.

Long term changes to the Bow Valley property market

While the short term supply and demand factors are having a noticeable effect on the market, I don’t believe it’s cause to worry about a bubble (just yet). Yes, some of these factors are cause for concern and may be due for a correction, and this is something we should all be aware of, but there are also other more sustainable factors that are driving up prices now too.

These longer term demand factors are, in my opinion, likely to create permanent changes to our market here in the Bow Valley, and have the potential to far outweigh any short term corrections.

In short, I believe these factors are likely to create long term, steady price increases on property in the mountains. Let’s take a look:

Increased savings

With travel, vacations and discretionary spending coming to a virtual standstill, personal savings have dramatically increased. For many, this has meant an ability to save for a much bigger downpayment and access to more expensive property. So again, this is a one time event that has increased the spending power of a large proportion of the population. This is creating increased demand and upwards pressure on prices.

In my opinion, this is likely to have caused a permanent shift in the demand for more expensive property. While Covid has been enormously detrimental for some, for others it’s simply been an opportunity to save at a faster rate and increase their social mobility. Once travel returns and people are more free to spend again, there will of course be a slowdown on what people can save, but it’s likely that their level of savings won’t fall back to previous levels.

So it’s quite possible that this increase in affordability is likely to permanently shift prices up on desirable properties, such as properties in the Bow Valley.

A change in the workplace

The next important factor is a change in attitudes toward remote work, and what I believe is a massive shock overhaul of literally an entire country’s workplace requirements.

Historically, workplace trends tend to change gradually over several years, as populations are slowly influenced by new technologies and innovations, but what we’re seeing in 2020 and 2021, though, is a massive, virtually instantaneous change in attitudes about going in to the workplace vs. working from home.

Across the entire world (seemingly all at once) companies have had to rethink their office strategy and accommodate employees working from home. Indeed, many companies were already contemplating this in their future anyway, and simply moved up their timelines for a ‘remote work’ workforce.

For many businesses, the new work-from-home paradigm revealed major inefficiencies in previous operations, as well as major savings and improvements in work satisfaction and increases in productivity. This has been enough to cause many companies to permanently change their policies.

In virtually every business, real estate is the most expensive cost (aside from payroll), and countless businesses have now found that they can still function perfectly well without an office AND save a huge amount of money each month.

What does all this mean for Bow Valley real estate?

This one off, massive shift means that a huge, huge proportion of the workforce has been sent home and will never be asked to come back to the office again.

And now that proximity to the workplace is no longer a requirement, it’s created massive mobility for the workforce and a shift in priorities when people are looking for a home.

By removing a need to live near the office, a huge swathe of the workforce is now free to live and work wherever they like! And for many of us, being in the mountains is where we like to be! If you could get up and go for a hike before work, or bike the Bow Valley Parkway on your lunch break, wouldn’t you choose that over a house in Calgary or Edmonton?

For many people, working from home has literally opened up the entire country to them, and so naturally many of them are bee-lining for the mountains.

I personally believe that this is a seismic and permanent shift in our living habits, and that it’s going to cause a permanent shift in our demand for mountain real estate. In layman’s terms, I think this is going to cause a permanent increase in prices in the mountains as people gradually realise they can live in Banff or Canmore now.

From my own experience, I’ve seen a large uptick in longer term Airbnb rental requests in our Calgary Airbnb from people who are suddenly able to experiment with working in different cities. It’s a noticeable change in the rental demographic that I think is going to be magnified tenfold in the mountains.

Increased demand for recreational property

Canada has an ageing population, and many are reaching retirement age. As more of our population enters this bracket, there is going to be an increase in demand for recreational property. I think this may have been further exacerbated by a sudden crystallisation of priorities for a lot of people cusping on retirement. 2020 may have caused a change in attitudes amongst the retiring generation, leading them to lean more towards vacation properties or more enjoyable recreational homes they can escape to if something like this ever happens again.

A lot of people have realised that when a lockdown happens again, and at this point it’s probably fair to say when, not if, they don’t want to be stuck in the city with nothing to do. They want to breathe the fresh air in the mountains and have the freedom to go for a walk without having to rub shoulders with hundreds of other people on the street.

For many, the mountains offer health security that they simply can’t find in the city. As a result, we’re seeing a lot more visitors from cities like Calgary and Edmonton, and we’re likely to see a lot more people transplanting in the coming months and years too.

All of this leads me to believe that this will also cause long term upward pressure on the market prices.

Increasing population

It is an unavoidable fact that the population of Canada is steadily increasing each year. While cities can grow to accommodate the increased population, our little mountain towns can’t (Three Sisters development aside). It’s inevitable that our growing population is going to create increased demand for mountain real estate, and that it’s only going to get more exclusive in the years to come.

Canadians discovered the mountains in 2020

It might sound crazy, but last year was the year many Canadians discovered Banff and Canmore for the first time. You might be surprised to learn that the traffic in Banff was only down 17% last summer, AFTER the borders closed to the US. What does that mean? It means Canadians picked up the slack from International tourism. They had nowhere else to go.

Canadians that would normally go away for the summer, suddenly found themselves bored with nowhere else to go other than Banff and Canmore. They tried hiking for the first time in the summer and they tried skiing for the first time in the winter. You may have noticed that the trails were busier last year than they’ve ever been before. Search and rescue was overloaded by first time hikers, and Kananaskis was so busy that they’re implementing a park fee in 2021.

All in all, it’s all evidence to me that 2020 was a year where the Rocky Mountains were introduced to a whole generation of Albertans and broadly speaking, Canadians, that had never really been in the outdoors until now.

So moving forwards into the future, 2020 and 2021 have created a permanent change in the demand for mountain adventures. And that means increased potential demand for rental properties, short term rentals and generally speaking, demand from city folk looking for Banff and Canmore real estate. Today’s young hikers are inevitably going to start moving over here as soon as they’re able to and it’s likely to create long lasting changes in the value of Banff and Canmore’s real estate market.

Final thoughts

In this post, I’ve tried to discuss a few reasons why we’re seeing such unbelievable things in the Bow Valley market right now. It seems that there are a whole host of reasons why prices are continually moving upwards- some concerning, some the opposite – and really, what we’re seeing today is the perfect storm of factors that are continuously driving the price up.

When will it end? I couldn’t begin to predict. But I will say that I feel positive about the long term potential for investing in mountain real estate. If you currently own property, there’s a good chance you’ve realised some extraordinary gains over the past few years, and it could be a good time to cash out. If you’re thinking of buying, sure it’s expensive now, but I think there’s still plenty of room for growth in the market over time.

The fundamentals might be pointing towards a market that’s a little overheated, but my best prediction is that the long term fundamentals should see this market continue to grow in value.

If you enjoyed reading this, or have your own views on the state of the market, feel free to comment or reach out. If you’re interested in purchasing a property in the mountains, please feel free to give me a call on +4034012066 or email me at

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