Золотая лихорадка Альберты
Что происходит и каковы перспективы
Over the past two years, Calgary real estate has been in extremely high demand among investors. The situation here is the complete opposite of Ontario. New statistical data on Calgary has just been released by economists at BMO Bank, and today I would like to share these figures with you. I will mention only some of the key points from the BMO report.
Alberta’s economy in 2023 is showing unprecedented growth. Today, the province’s economic indicators have surpassed even those seen during Alberta’s oil boom in the early 2000s. It is forecast that Alberta’s budget surplus this year will reach at least $2.4 billion, and if oil prices remain at their current level until the end of the year — which is very likely — the surplus will be significantly higher. This is happening despite the fact that Alberta has now moved away from full dependence on oil, with only 20% of budget revenues tied to energy resources. All of this is taking place while the vast majority of Canadian provinces are currently running large budget deficits. For example, Ontario’s budget deficit in 2023 is projected to exceed $1.5 billion, while Canada’s federal budget as a whole is expected to show a deficit of more than $40 billion. The BMO report also points out that Alberta is now the fastest-growing province in Canada — a province that has achieved an economic miracle by completely restructuring its economy in less than four years, one and a half of which fell during the difficult pandemic period, when Alberta’s government, although strongly disagreeing with the actions of the federal government, was still forced to comply.
Today, after the province’s sovereignty act from the federal government of Canada came into force last year, no one can interfere with the development path Alberta has chosen. According to analysts, what is happening in Alberta today is, in reality, only the beginning of the province’s rapid growth. Alberta has already achieved phenomenal results, but the most important part appears to still lie ahead.
The report also notes that people are moving to Alberta en masse from other Canadian provinces, primarily from Ontario and British Columbia. Moreover, the number of people relocating is growing every day. By the end of 2023, Calgary’s population is expected to increase by approximately 100,000 people. This is with Calgary’s total population standing at about 1.6 million. In other words, although Calgary’s population is four times smaller than that of the GTA, in percentage terms the city is growing much faster. And this does not include students. Calgary is home to four major universities, where tuition costs are significantly lower, making them highly popular among both Canadians and international students.
Naturally, all of this could not help but affect Alberta’s real estate market. The BMO report indicates that Alberta’s real estate market — and Calgary in particular, as the province’s largest city — is now the strongest in the entire country. And although Calgary’s authorities are making every effort to increase the pace of construction, real estate prices here are rising before our eyes, finding a rental property is far from easy, and rental rates are now only about 25% lower than in Toronto. Without enough housing to accommodate everyone moving to Alberta, the provincial government followed the example of Ontario authorities and, as of January 1, 2023, banned foreigners from purchasing real estate. Nevertheless, an exception was made for non-residents who are legally in the country and hold a work permit: they are still allowed to purchase property in Alberta.
The Calgary Real Estate Board presents the following data for September. Detached home prices rose by 10.3% year over year, semi-detached homes by 10.1%, and apartment prices by 13.5%. Townhouses proved to be the strongest-performing segment of the market, rising by 15.7% over the year. Meanwhile, the number of properties listed for sale fell by 32% compared with last year. One of the clearest indicators of market activity is the “months of supply” index, which shows how many months it would take for all current listings on the market to be sold if no new properties were added. This index is widely used to assess the condition of a real estate market. Today, in Calgary, it stands at a critically low level — only 1.19 months. In other words, the number of properties listed for sale is barely more than one month’s worth of inventory.
As we expected, the price-growth momentum in Calgary continues to build. Back in July, the year-over-year statistics were still showing more modest figures. And remember: all of this is happening against the backdrop of Canada’s broader crisis of high borrowing rates. In most provinces, real estate prices have declined, and buyer activity remains extremely low.
It is not difficult to understand why this is happening. Today, with Calgary real estate prices twice as low as in Toronto, the average household income here is already 25% higher than in Toronto. And the gap continues to widen. At the beginning of the year, the difference was much smaller. For those moving to Calgary from Ontario and British Columbia, Calgary real estate prices today are, in effect, a gift. In addition, Calgary has no HST, and the overall cost of living here is significantly lower. As a result, almost any family, even one with a modest income, can afford to purchase real estate — if not a house or townhouse, then at least an apartment.
In my opinion, Calgary today is the best place to invest in real estate. The risks here are practically reduced to zero, while the return on investment in new construction is exceptionally high. We did not see this level of return even during the strongest years of real estate price growth in Toronto. Deposit returns are also affected by the fact that, unlike in Toronto, purchasing at the pre-construction stage in Calgary requires only a 10% deposit — and even that is not paid all at once, but in several installments during the first year of construction. Calgary has no land transfer tax and no development charges, so unlike Toronto, where closing costs today can reach $30,000–$40,000, closing costs in Calgary are limited essentially to legal fees.
Prices for spacious two-bedroom apartments here are under $400,000, while four-bedroom townhouses with a two-car garage in excellent areas can be purchased at the early construction stage for just over $500,000. As a result, investors wishing to purchase real estate at the pre-construction stage need only about $35,000 to $55,000. That is at least three times less than in Toronto. Today, Calgary offers an excellent opportunity not only for professional investors, but also for newcomers to the world of investing who do not yet have substantial savings. In many ways, Calgary may now represent the last real opportunity to begin investing with only a relatively small amount of money on hand.
Over the past two years, we have helped hundreds of investors purchase real estate in Calgary. Our company provides a full range of services for investors, including buying, selling, leasing, property management, legal support for transactions, and financing — all available in one place, at our office in Richmond Hill.
Do not miss your chance to invest your money very profitably while this opportunity is still available!