Average housing prices in Calgary that are less than half what they are in Toronto are attracting more and more real estate buyers from Canada’s largest city.
For the past year or so, the Calgary real estate market has been witnessing a unique environment – people in Toronto who are faced with exorbitant home prices and sky high rents are moving West. Not only from Toronto but also from other parts of the country. They’re coming for jobs and lured by a lifestyle where affordability of home prices reigns compared to places like Toronto and Vancouver.
The numbers are impressive. According to the Alberta Real Estate Association, 31,031 people moved to Alberta from other provinces in the first quarter of 2023, up 44.7 per cent from a year earlier. More people came to the province from British Columbia and Ontario compared to the previous first quarter. A total of 15,245 people left the province for elsewhere in Canada in the first quarter, a decrease of 8.1 per cent from the same period in 2022. The result was a net gain of 15,786 people to Alberta’s population in the first quarter. This was an increase of 225.5 per cent from the first quarter of 2022.
And why wouldn’t they find Calgary an alternative where they can make some money and buy a home?
According to the Canadian Real Estate Association and its MLS Home Price Index, in June, the aggregate benchmark price in Calgary was $538,600. In the Greater Vancouver Area it was $1,186,100 while in Toronto it was $1,163,200.
“The current real estate market has not only impacted the influx of out-of-town and out-of-province buyers but it has also impacted the influx of out-of-province real estate professionals who are entering the Alberta marketplace,” said David Lem, Broker/Manager with RE/MAX Real Estate (Central) in Calgary.
“The real estate industry in Canada is governed provincially by its respective licensing bodies. Alberta is governed by the Real Estate Council of Alberta (RECA). Numerous real estate professionals are seeing a sustainable business practice in being licensed in multiple provinces in order to service their clients. In order to represent a client in the purchase or sale of a property, an associate must be licensed in that province. RE/MAX Real Estate (Central) currently has several licensed associates who are licensed in the province of Alberta and another province, notably Ontario or British Columbia.”
One of those working with Central is Arthur Chan, with RE/MAX Hallmark in Toronto, who joined Central in June.
“With the Bank of Canada’s constant hiking the rates, a lot of people cannot afford their mortgages. This market is totally different than the Calgary market because we’re really slow right now and I think that a lot of people are selling here and they’re buying there. It’s one-third of the price and the lifestyle is different as well,” said Chan. “It’s not just the real estate market but the overall. Alberta has a lot more attractive government incentives.
“I’ve already relocated two people so far. I’m working on a third as soon as I sell their house and then actually I have a fourth one in line right now.
“There’s a high trend right now . . . I think we’re going to see more demand. I think the market right now has slowed down because of the interest rate hikes but as Torontonians cannot afford their mortgage, they’re going to liquidate . . . I think the Calgary is going to blow up in the next five years.”
In the Spring, for the second time, the Alberta government launched another phase of its Alberta is Calling campaign in an attempt to lure more skilled workers to the province, enticed by job opportunities, wages and housing affordability.
On the provincial government website where all the information is on the campaign, there’s a short video clip of Alycia.
“I live in Calgary, Alberta. I moved here from Toronto about three years ago. I lived in Toronto for about three years. At that point we were ‘oh we should buy a house here’ and you know the cost of housing in Toronto is astronomical. We had a realtor to help us with our rental search and our max budget was never big enough – even when we were renting, never mind buying,” she says.
“I was really excited to move to Calgary once we decided that that’s what we were going to do. As a new mom and had a young family I was looking forward to making a community here. Even though I still didn’t know anyone here I wanted to make it my home. We managed to pick a community that we thought would suit our price and lifestyle and what we’re looking for and came across this house. When it came down to it, this checks pretty much every box for us. It’s honestly night and day from what we had. I think we made the right decision for so many reasons, you know. In our heart we knew that this was going to be the right choice. Now I couldn’t imagine living anywhere else.”
That’s a sentiment that’s now being echoed by others moving to Calgary, particularly from Toronto.
That’s not likely to change for a while.
According to RBC Economics, July marked a second-straight month of softening activity in the Toronto-area market.
“With exceptionally high ownership costs already stretching the limit of many buyers, the latest interest rate increases no doubt sent more of them to the sidelines—stalling the surprisingly-brisk momentum that emerged this spring. But those still house hunting are seeing more options becoming available,” says RBC.
“We see high interest rates and the likelihood of a recession keeping real estate activity quiet in the area in the coming months.”
But Calgary has a different story. RBC says July marked the fourth consecutive increase in home resales in Calgary.
“In the absence of further rate hikes this year, we think strong economic momentum and, importantly, explosive population growth will continue to support a brisk pace of activity through the remainder of this year.”
And part of that ‘brisk’ activity is expected to be buoyed by out-of-province buyers, particularly from Toronto and other higher-priced markets, attracted to the affordable housing prices currently in the Calgary market.
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)