The days of Alberta residents migrating to other provinces are over, at least for now. In the second quarter alone, the province saw a net increase of about 10,000, thanks in particular to transfers from Ontario.
But people aren’t just moving themselves or their families to Alberta. Many people transfer money.
In recent years, Calgary has seen a surge in out-of-state homebuyers scooping up investment properties available for rent, largely driven by relatively inexpensive real estate.
“Prices in Toronto and other cities are completely out of reach for investors as well as end-users,” said the Toronto-based real estate broker, “condo millionaireAnd it deals mainly with investment properties.
“So people look outside their markets [and] Calgary is a very attractive market. “
And, depending on whether you are an investor, renter, or purchaser, this phenomenon will affect your bottom line differently.
On the one hand, out-of-state real estate speculation can drive up prices for homebuyers who actually live in Calgary.
On the one hand, the trend can also be viewed as a vote of confidence in Alberta’s economy.
what drives it
Ontario investors are scooping up Calgary rentals, lured by falling prices and a positive economic outlook. However, the trend has raised concerns that increased demand will drive up prices and put pressure on local homebuyers.
The influx of out-of-state investment began just before the pandemic, just as the Calgary economy began to recover from the 2014 oil crisis and rents began to rise.
“Just before COVID, [in] 2019, I [was] Investors started trickling in at first and then slowly started to accelerate,” said Natasha Phipps, an investment expert and real estate agent at CIR Realty in Calgary.
“[By the] In the spring of 2022, it felt like a lot of people were coming from Ontario to invest in Alberta,” Phipps said, adding that about three-quarters of last year’s sales came from out-of-state buyers. said to be of She was answering a call from a Toronto area code during her interview with CBC News.
Calgary’s home prices are on the rise, but condos in Calgary are more affordable than in other major cities, she said. It also increases the chances that the investor will be able to cover the expenses with rent without having to pull large sums of cash out of their pockets each month.
“In many other Canadian markets, it’s no longer possible,” she said.
The average sale price for a Calgary condo is around $297,000, compared with just over $720,000 in the Toronto area and $769,000 in the Metro Vancouver area, according to the area’s Real Estate Board.
Still, the appeal goes beyond cheap condos. Alberta buyers do not face land or real estate transfer taxes like they do in Ontario or British Columbia. In Canada, it is 1-3% of the final sale price for properties over $55,000. Also, there is no cap on rent increases, and the Housing Act can be viewed as beneficial to property investors.
“Lease laws work more for landlords than anywhere in Canada,” said John Andrews, a former professor and real estate consultant at Queen’s University in Kingston, Ontario.
“Calgary currently has a very strong economic outlook and wages are relatively high, so at this time it is very lucrative for people from other parts of Canada, especially Toronto, to invest in Calgary real estate.”
‘Unprecedented’ interest
According to developer Cole Haggins, about 70% of recent sales have come from buyers in Ontario, mostly investors.
“[It’s] Huggins, president of multifamily builder Cedarglen Living, said the trend started about a year and a half ago. Not nearly on the same level. “
Paul Battistella, managing partner at Battistella Developments, has noticed a similar trend. Developers are building condos near downtown Calgary and say about half of the buyers are from Ontario.
“We’re becoming a rental building, but it’s not one owner that holds it. A hundred owners own these individuals. [units] For rent,” he said.
The number of Ontario realtors applying to be licensed in Alberta has surged. The Alberta Real Estate Council typically receives about 100 “labor migration” applications per license year, but in 2021-2022 there will be nearly 600, the majority of which will come from Ontario. And BC is his second.
The trend has also meant increased demand at Hope Street Management Corporation, a Calgary property management company.
President and CEO Chamon Qureshi described the company’s typical client as a “jet-setter.” For example, recently Texas or Silicon He is a Calgarian who got a new job in the Valley and wants to rent a house. Calls from clients in Toronto and Vancouver.
“We are seeing a decline in the proportion of jetsetter-type clients that we are accustomed to, and an increase in the proportion of investor-type clients,” according to the pool of rental inventory available in the city.
looking ahead
As winter sets in, there are signs that the trend has started to cool off, and there is debate as to whether it will pick up again in the spring with a temporary slowdown.
In early 2022, Calgary mortgage broker Josh Higgelke was getting “a flurry of phone calls” from investors in Ontario and British Columbia, but that’s changed recently, he said. From people actually planning to start a new life in Alberta.
“The market has softened somewhat for investors as interest rates have risen,” Higerke said.
Some argue that the long-term outlook for the Calgary market is solid. The oil and gas sector, which has always been a core part of the economy, rake in cash Recently, the local technology industry has also Growing.
And as long as people move to Alberta, they need a place to live, whether it’s for a job or looking for a different lifestyle.
“The increased demand for these income properties is probably a good bet,” said Andrew, a former expert at Queen’s University.
