Priced out of Ontario, homebuyers turn their eyes to the Calgary real estate market

Click to play video: 'Experts see similarities between behaviour of Canadians, foreigners investing in residential real estate' Experts see similarities between behaviour of Canadians, foreigners investing in residential real estate
WATCH ABOVE: Ottawa aims to cool Canada's housing market by cracking down on foreign investors. Though, experts say foreign investors aren't too different from corporate investors and every day Canadians, including dozens of MPs from all political parties, who are landlords. As David Akin explains, it's highlighting how domestic investment contributes to the housing crunch – Apr 19, 2022

CALGARY — As Ontario’s sizzling real estate market puts home ownership out of reach for many Canadians, a growing number of prospective buyers are looking west in hopes of achieving their white-picket-fence dreams.

Like newlyweds Vineet Mrug and Kushbu Mistry, who relocated to Calgary from their hometown of Toronto last year, some residents of the GTA and other hot Ontario markets are moving to Alberta for what they believe is their last opportunity to own an affordable piece of real estate in a large Canadian city.

“We entertained the idea (of staying in Toronto), but it was very short-lived, just because of the sheer price of homes,” said Mrug, adding he and his wife made the move with the intention of starting a family soon.

Read more: Canadian home prices rose 11% annually in March while sales fell: CREA

Story continues below advertisement

“In Ontario, especially Toronto, within our budget we were restricted to a two-bedroom condo. And that really would not have cut it for us, with the kind of plans that we had.”

Mrug and Mistry ultimately purchased a 250 square metre home with a walkout basement and a large backyard in Calgary’s northwest neighbourhood of Valley Ridge.

“We got three times the amount of house for the same amount of money,” Mrug said. “We’re very happy with our decision.”

Mrug and Mistry’s experience is not unique. A quick perusal of housing-related forums on online mediums like Reddit turns up dozens of recent inquiries from GTA residents asking about weather, commute times and popular neighbourhoods in Alberta cities, especially Calgary.

Read more: Winnipeg home prices saw record-setting year-over-year increase last quarter: report

Realtors in the western province are also buzzing with anecdotes about what they say is an unusually high number of inquiries from Ontario. Those stories appear to be backed up by Statistics Canada data, which says Alberta led the country in interprovincial migration in the fourth quarter of 2021, for the first time since 2015. On a net basis, the majority of Alberta’s new interprovincial migrants in the fourth quarter came from Ontario.

“We’re starting to see that migration based on affordability,” said Don Kottick, president and chief executive of Sotheby’s International Realty Canada. “I think we’re seeing some of this driven by the old FOMO, the fear of missing out. People are going to look where you can still afford a house.”

Story continues below advertisement

The benchmark price for detached homes in Calgary rose to $620,500 in March, which is over $73,000 higher than December levels and 20 per cent higher than levels recorded last year. Many homes are receiving multiple offers and selling over the asking price.

Read more: Upwards of 41% of housing in some provinces held by multiple-property owners

On the higher end of the market, the uptick in activity is even more dramatic. Detached and attached home sales in the $1 million-plus price category in Calgary rose 71 per cent and 258 per cent year-over-year respectively, according to Sotheby’s.

But even as Calgary home prices rise, they pale in comparison to what prospective homebuyers are facing in other parts of the country. In Toronto, the average selling price in March of 2022 was $1.3 million, according to The Canadian Real Estate Association, while the composite benchmark price in Metro Vancouver for the same month was $1.4 million.

While the federal government committed in its most recent budget to taking steps to cool Canada’s overheated housing market, for many first-time homebuyers, it’s too little, too late. Data analyst Ryan Sekulic — who had been working in the U.K. — accepted a job at Calgary tech company Helcim last year, after looking at opportunities in both Toronto and Vancouver.

Click to play video: 'Canadian real estate ban on foreign investors' Canadian real estate ban on foreign investors
Canadian real estate ban on foreign investors – Apr 14, 2022

“None of the jobs I was looking at in Toronto or Vancouver paid enough to justify living in either of those cities,” said Sekulic. “I did eventually want to be a homeowner, and I’ve bought one now which would have been impossible there.”

Story continues below advertisement

Canada’s housing affordability crisis has coincided with Alberta’s recovery from years of recession due to depressed oil prices, which may be another reason Eastern Canadians are once again looking west. According to the Conference Board of Canada, Alberta is projected to lead the country in economic growth in both 2022 and 2023 due to surging commodity prices. The province is also working to diversify its economy, with some success — both Calgary and Edmonton have seen rapid growth in their local tech scenes.

Outside buyers also appear to be attracted to Calgary’s proximity to the Rocky Mountains. Recreation properties in Alberta are now the most expensive in all of Canada, outstripping even B.C., according to a recent report from Royal LePage Realty. In Canmore, a desirable mountain town located 80 km west of Calgary, single family home prices have soared 33 per cent year-over-year, to $1.36 million.

Click to play video: 'Politicians doubling as landlords while governments are pushed for affordable housing solutions' Politicians doubling as landlords while governments are pushed for affordable housing solutions
Politicians doubling as landlords while governments are pushed for affordable housing solutions – Apr 13, 2022

While much of that demand is still driven by Western Canadians, local Royal LePage realtor Brad Hawker said a growing number of Canmore properties are being snapped up by Ontario retirees.

Story continues below advertisement

“They’re cashing out of a (high-priced) market, leaving segments of Ontario, and coming here for a combination of more affordable real estate and a different quality of life,” Hawker said, adding he doesn’t expect the threat of rising interest rates to slow that specific trend.

“I honestly don’t see it changing. A lot of those buyers are cash buyers,” Hawker said. “They aren’t putting a mortgage on the property anyway, so interest rates aren’t relevant to them.”

Sponsored content