Housing Market Stampede: Why Calgary Blazes While Others Simmer
Calgary's real estate market is on fire, with record sales and rising prices outpacing the rest of Canada. While other major cities grapple with a cooling market, Alberta's largest city is experiencing a surge in demand. But what's driving this phenomenon?
Interprovincial Migration
A confluence of factors appears to be at play. According to a report by ATB Financial's Chief Economist, Mark Parsons, strong economic performance and record-breaking migration are key ingredients [1]. Alberta, and particularly Calgary, have benefitted from a rebound in the oil and gas sector, creating job opportunities and attracting newcomers. Statistics Canada reports that Alberta saw the highest net interprovincial migration in 2023, with over 55,000 people relocating from provinces like Ontario and British Columbia, where housing affordability remains a significant challenge.
This influx of population is putting pressure on Calgary's housing stock. The Canadian Real Estate Board (CREB) highlights that year-to-date home unit sales in Calgary surged:
9.4% increase in the number of houses sold
24.4% increase in condo apartment sales
19.2% increase in townhouses sold
This heightened demand, coupled with a limited supply, is pushing prices upwards. The median house price is up 11% compared to April 2023 and the median apartment price has risen 21%.
While affordability concerns are rising, Calgary's housing market remains significantly more accessible than Toronto and Vancouver. The March 2024 benchmark price of a condo apartment in Metro Calgary was $363,600, Greater Toronto was $684,800, and Greater Vancouver was $777,500. This relative affordability is attracting young professionals and families seeking homeownership opportunities.
Out-of-Province Investors Add Fuel to the Fire
The influx of residents isn't the only factor driving demand. Anthony Lewis, a Calgary real estate agent says, “I get a lot of people from Ontario and B.C. offering sight unseen. They want to buy an investment property in Calgary, so we have video calls. I’m seeing unconditional offers which may be normal in Ontario, but over here we’re like, ‘get the home inspection.’”
These investors, particularly those from expensive markets like Toronto and Vancouver, see Calgary as an attractive option due to its lower prices and potential for rental income. This increased investor activity adds further competition for available properties, putting upward pressure on prices.
A Victim of Success
Calgary's hot housing market presents both opportunities and challenges. While it offers a path to homeownership for many Canadians and signifies a thriving economy, it also raises concerns about affordability and long-term sustainability.
