One of the interesting aspects of Calgary’s resale housing market for the past little while is how attractive prices are here for potential homebuyers currently living in other major Canadian centres, particularly in Ontario and British Columbia.
For the past few years, many housing market research studies and reports have highlighted how affordable Calgary is especially when compared to those other places.
And while Calgary prices have increased over the past few years they remain affordable in general and especially for potential homebuyers in other parts of the country.
For example, RBC’s regular Housing Affordability report shows the proportion of median pre-tax household income that would be required to cover mortgage payments (principal and interest), property taxes, and utilities based on the benchmark market price.
“Despite rising materially in the past year, RBC’s aggregate measure (43.2 per cent) exceeds its long-term average (38.8 per cent) only moderately—suggesting ownership costs aren’t yet overwhelming buyers. That’s likely the reason why market activity has remained relatively brisk to date, still running above pre-pandemic levels. Prices have stayed firm as well with any declines minimal. We see this continuing in the near term,” says Robert Hogue, Assistant Chief Economist at RBC.
Nationally, the share of income a household would need to cover ownership costs in the fourth quarter of 2022 was 62.8 per cent. Vancouver was 98.1 per cent; Toronto 85.9 per cent; Ottawa 52.7 per cent; and Montreal 54.0 per cent.
The national average since 1985 exceeds Calgary’s at 40.8 per cent. And so do many other Canadian cities like the Toronto area (49.6 per cent) and the Vancouver area (59.3 per cent).
When looking at those numbers, it then comes as no surprise that the Calgary market remains relatively strong. Yes, MLS sales have decreased in comparison to the last couple of years but people need to keep in mind that those were record years in the market.
“The downturn—if there ever really was one—appears to be done. Home resales rebounded a strong 28 per cent m/m in April (based on our calculation of seasonally-adjusted values). And prices ticked slightly higher. The thing is that the market remained impressively robust over the past year despite the sharp drop in activity,” says Hogue.
“Resales never fell below pre-pandemic levels and the MLS HPI kept a holding pattern, bucking the declining trend seen in virtually every other market in Canada. Calgary’s price index in April still stood 1.2 per cent above where it was a year ago. With market conditions tightening in the past three months—and now favouring sellers—odds are prices will appreciate some more in the period ahead.”
More recent statistics from the Canadian Real Estate Association indicate the sharp contrast between Calgary prices and those in Vancouver and Toronto.
CREA reported that its Aggregate Composite MLS® Home Price Index (HPI) in April was $723,900 for the aggregate price nationally. In Calgary, it was $529, 800 while it was $1.1146 million in the Greater Vancouver Area and $1.106 million in the Greater Toronto Area.
The national average home price in April was $716,000 while it was $559,573 in Calgary; $1.294 million in Greater Vancouver; and $1.153 million in Greater Toronto.
No wonder people from those bigger cities are increasingly looking at Calgary for a lifestyle change where they can buy a home for a much lesser cost or an equivalent home in Calgary to what they’re spending in Vancouver and Toronto offers so much more.
It’s one of the reasons Alberta’s population continues to grow and attract more people from other parts of Canada and the rest of the world.
It’s also why in March the Alberta government launched its second Alberta Is Calling campaign to attract more skilled workers from across Ontario and Atlantic Canada.
The campaign focuses on job creation in the province, the fact Alberta workers continue to have the highest wages in the country, the province’s economic advantages, the quality of life in the province, and of course the affordability factor.
“Since last summer, nearly 70,000 individuals have moved here, the largest inflow of people we have seen in two decades. Between opportunity and quality of life, Alberta has a fantastic value proposition and the Alberta is Calling campaign has helped to share this message,” says Adam Legge, President of the Business Council of Alberta.