The days of Alberta bleeding residents to other provinces are gone, at least for now. In the second quarter alone, the province saw a net gain of about 10,000 people thanks to moves from other parts of the country, especially from Ontario.
But people aren’t just moving themselves and their families to Alberta — a high number are moving their money.
In recent years, Calgary has seen a spike in out-of-province homebuyers scooping up investment properties they can rent out, with the primary motivator being comparatively cheap real estate.
“Prices in Toronto and those other cities are completely out of reach, not just for end users but for investors as well,” said Kyle Dovigi, a Toronto-based real estate broker who markets himself as the “Condo Millionaire” and who deals primarily in investment properties.
“So people look outside of their markets [and] Calgary is a very, very appealing market.”
And depending on whether you’re an investor, a renter or a buyer, the phenomenon may mean different things for your bottom line.
On the one hand, out-of-province real estate speculation has the potential to drive up prices for would-be homebuyers who actually live in Calgary.
On the other, the trend could be viewed as a vote of confidence in the Alberta economy — and a source of much-needed rental properties in an increasingly tight market.
What’s driving it
‘I have spoken to someone from Ontario almost every single day’ in the last two years, said Calgary investment Realtor Natasha Phipps. (Paula Duhatschek/CBC)
The influx of out-of-province investment began just before the pandemic, right as the Calgary economy began to recover from the 2014 oil crash and rents started to rise.
“Just before COVID, [in] 2019, I [was] first starting to see the trickling of investors, and then that slowly started to speed up,” said Natasha Phipps, an investment specialist Realtor with CIR Realty in Calgary.
“[By the] spring of 2022, I felt like we were having, like, planefuls of people coming from Ontario to invest in Alberta,” said Phipps, who said about three quarters of her sales in the last year have been from out-of-province buyers — and she was fielding a call from a Toronto area code during an interview with CBC News.
Even as home prices in Calgary have risen, it’s remained more affordable to buy a Calgary condo than in other major cities, she said. And it’s also more likely that investors can cover their expenses through rent without having to fork out a chunk of cash every month from their own pockets.
“In many other Canadian markets that’s just not possible anymore,” she said.
In Calgary, the average condo sale price is about $297,000, whereas it’s just over $720,000 in the Toronto region and $769,000 in the Metro Vancouver area, according to the regions’ local real estate boards.
Still, the lure is about more than cheap condos. Buyers in Alberta don’t face land or property transfer taxes as in Ontario or B.C., where they run between one and three per cent of the final sale price on properties that cost more than $55,000. There’s also no cap on rent increases and housing legislation can be seen as beneficial to property investors.
A COVID-19 outbreak has been declared at Verve, a condo building in Calgary’s East village. (Google Maps)
“The tenancy laws really favour landlords to a much greater extent than elsewhere in Canada,” said John Andrew, a real estate consultant and retired professor at Queen’s University in Kingston, Ont.
“There’s a very strong economic outlook right now for Calgary, wages are relatively high, so it’s pretty favourable at the moment for people in other parts of Canada — especially in Toronto — to be investing in Calgary real estate.”
‘Unprecedented’ interest
Cole Haggins, president of the multi-family developer Cedarglen Living, says the amount of out-of-province investment is ‘extremely unprecedented’ for his business. (Paula Duhatschek/CBC)
Developer Cole Haggins said about 70 per cent of his sales lately have been from Ontario buyers, the majority of them investors.
“[It’s] extremely unprecedented,” said Haggins, president of the multi-family home builder Cedarglen Living, who said the trend kicked off about a year and a half ago. “We have seen investors in the past, but they’re usually Calgary-based investors and not nearly at the same level.”
Paul Battistella, a managing partner at Battistella Developments, has noticed a similar trend. The developer is building a condo complex near Calgary’s downtown and said about half the buyers have been from Ontario.
Developer Paul Battistella says his condos are attracting a high amount of interest from buyers in Ontario. (Paula Duhatschek/CBC)
“We’re becoming a rental building, but it’s not one owner that’s holding it — it’s, you know, 100 owners that are having these individual [units] for rent,” he said.
There’s been a huge spike in the number of Ontario real estate agents applying to become licensed in Alberta. The Real Estate Council of Alberta typically gets about 100 “labour mobility” applications per licensing year, but in the 2021-2022 year it had almost 600, the vast majority of them from Ontario, with B.C. coming in second.
The trend has also meant more demand at the Calgary property management firm Hope Street Management Corp.
President and CEO Shamon Kureshi described the company’s typical client as a “jet-setter” — for example, a Calgarian who has recently taken a new job in Texas or Silicon Valley and wants to rent out their home — but these days, he’s fielding more calls from clients in Toronto and Vancouver.
“The ratio of those jet-setter-type clients that we’re used to is going down, and the ratio of investor type clients is going up,” said Kureshi, who added that a silver lining to the trend is a rise in the pool of available rental stock in the city.
Looking ahead
In the last six months, Shamon Kureshi, president and CEO of the property management firm Hope Street Management, has received a ‘huge spike’ in inquiries from condo owners who want to rent out their properties. About a third of them have been from Toronto and Vancouver. (Paula Duhatschek/CBC)
As winter sets in, there are signs the trend has started to cool and there is debate about whether it’s a temporary slowdown that will pick up again in the spring.
At the outset of 2022, Calgary mortgage broker Josh Higgelke was getting “a ton of calls” from investors in Ontario and B.C. Nowadays, he said, that’s changed — he still gets plenty of out-of-province inquiries, but most of them are from people who are actually planning to set up new lives in Alberta.
“With the increase in interest rates that we’ve seen, the market has somewhat softened for the investor,” said Higgelke.
Real estate consultant John Andrew predicts buyers will continue to seek out income properties in Calgary, especially if current population trends continue. (Submitted by John Andrew)
Some maintain the long-term outlook for the Calgary market is solid. The oil and gas sector, always a core part of the economy, is raking in cash these days, but the local tech industry is also growing.
And as long as people are moving to Alberta, whether it’s for work or in search of a different lifestyle, they’ll need places to live.
“It’s probably a pretty good bet that there will be growing demand for these income properties,” said Andrew of Queen’s University.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
