Affordable Calgary Housing Market Appeals to Newcomers and Students

Calgary's affordable housing market appeals to newcomers and international students who are looking to either rent or buy.

According to data released in December by Statistics Canada, Alberta's population increased by almost 60,000 people between July and September of 2022. That's more than in any other year since StatsCan started estimating populations in 1951.

The government agency says the population of Alberta as of the start of October is 4,601,314 people, which is an increase of 58,203 from three months before.

And, as reported by the CBC's Rob Easton, that 1.28 percent increase is "a proportional growth that rivals some of the biggest growth periods in Alberta's history and demonstrates the return of a stronger economy," according to analysts.

Economist Trevor Tombe with the University of Calgary told Easton: "We have recently been seeing increases in inflows towards Alberta, and that was normal during periods of high oil prices. But what makes this pretty unusual is just the sheer magnitude of it." 

Calgary's inner-city praised

Bob Dhillon, the founder, president and CEO of Mainstreet Equity Corp. is a big Calgary booster. He sees the city welcoming tens of thousands of more residents. 

“Calgary has the greatest inner city,” Dhillon recently told Business in Calgary. “Bridgeland, Sunnyside, East Village, Inglewood, 17th Avenue, First Street, Mission. Look at all our little inner-city pockets. They’re all amazing. The only thing missing is another 100,000 people to make it thrive. And they’re coming now.”

Canada admitted a record-breaking 431,000 new permanent residents in 2022.

The federal government also recently announced its targets for 2023-2025. The country now hopes to land 465,000 new immigrants in 2023. That number will rise to 485,000 newcomers in 2024 and will jump in 2025 to 500,000 new arrivals.

This surge in immigration (mainly from India, the Phillippines and China) will, experts say, have a significant impact on both the rental and home-buying markets moving forward. 

Also, up to 270,000 additional international students were expected to have arrived by September, 2022 with more set to come for the January semester.

"The scale of (Alberta's population growth) is pretty stark, and a lot of folks coming in from B.C. and Ontario as well, potentially a sign of strengthening economic conditions here relative to elsewhere, and more affordable housing, in particular," Tombe told CBC.

Rent prices in Calgary remain affordable

The rent prices in Calgary are certainly more affordable than in most of Canada's large cities, which is definitely appealing to newcomers and international students. 

On Rentals.ca's survey of November 2022 rent prices in 35 Canadian cities, Calgary ranked 25th, just behind St. Catharines, Ontario and just ahead of Laval, Quebec. 

A one-bedroom apartment in Calgary was rented for $1,473 in November. That's up 1.7 percent over October's figure and up 18.7 percent from the same month in 2021.

A two-bedroom, popular with many newcomers to Canada, went for $1,860, an increase of 5.0 percent over October prices and up 21.4 percent over the same month last year. 

Calgary rents far cheaper than those in Gateway Cities

Newcomers can compare Calgary's rent prices with those in Vancouver and Toronto, ranking first and second respectively on Rental.ca's list.

A one-bedroom in Vancouver in November went for $2,633 (up 2.2 percent) and in Toronto, you would have paid $2,532 (up 2.2 percent). 

That means rents in Calgary are just over $1000 cheaper than those in Canada's two most popular "gateway cities" for immigrants. 

"Calgary is the market with the highest demand for us. International students," said Miguel Vasquez, a Digital Marketing Specialist for Mainstreet Equity Corp. "Immigrants, and people moving from Ontario and places like Vancouver to Calgary and other cities where we have properties have kept us very busy. It’s going to be very interesting to see how the demand shifts entering the yearly “slow” season, however, we are expecting to have high double-digit lead growth compared to previous years.”

Year-over-year rent increases are high

According to the Rentals.ca report, the average rent for all Canadian rental properties in November was $2,024 per month. That's a year-over-year increase of 12.4 percent and a month-over-month increase of 2.5 percent. 

The data includes single-detached, semi-detached, townhouses, condominium apartments, and rental apartments.

Calgary home sales fell 10 percent

Mirroring almost all cities in Canada, sales activity in Calgary’s housing market declined in May 2022.

WOWA, in their recent Calgary Market Housing Report,  reported a 10 percent decline in sales in May month-over-month, but the year-over-year increase is  3 percent.

The price for a detached home in Calgary rose by 11 percent year-over-year to $660k. Semi-detached home prices increased by 7 percent year-over-year to $542k; townhouse prices increased by 11 percent year-over-year to $364k while condo apartment prices remained the same year-over-year.

According to a recent housing report by Scotiabank's Farah Omran, Canadian home sales fell for the third month in a row, dropping by 8.6 percent (month-over-month) in May, while listings were up by 4.5 percent (month-over-month). 

The rate hikes were meant to remove some of the exuberance from the market, which they are doing - Scotiabank's Farah Omran

Omran says this has brought more balance to the market and shows the effect recent interest rate hikes by the Bank of Canada are having on what was once very much a seller's market.

Will newcomers arrive in a buyer's market?

And with Canadian housing prices having fallen for the third month in a row in almost all cities, this means newcomers looking to buy in places such as Calgary will likely find an even more balanced housing market - or even a buyer's market - when they arrive. 

"The rate hikes were meant to remove some of the exuberance from the market, which they are doing—admittedly," said Omran, adding that they are doing so at a "much faster pace than previously anticipated."

The Calgary region, notes the WOWA report,  has been the most affordable housing market among the four largest Canadian cities of Toronto, Montreal, Vancouver, and Calgary over the past three years. This affordability, the report says,  acts as a tailwind for the Calgary real estate market as some people are moving their residence from southern Ontario or lower mainland BC to Calgary.

Calgary market turns the corner

Its affordability and the surging economy are partly why Calgary and Alberta have turned the corner after more than a year during which they lost population to interprovincial migration, dating back to the start of 2020 before the COVID-19 pandemic began.

“It’s a real turnaround in the flow of people from the other parts of the country,” said Rob Roach, chief economist for ATB Financial. He said Calgary and Alberta’s migration woes date back to the provincial recession of 2015-16.

In other good news, Calgary recently tied with Zurich, Switzerland for third place in the Economist Intelligence Unit's (EIU) annual ranking of the world's most liveable cities.

 

Calgary has been in the top 10 before, but the third spot is the highest-ranking the city has reached, beating out Vancouver in fifth place and Toronto in eighth place.

"More Calgarians are telling the story of their city, and people are taking notice," said Mayor Jyoti Gondek in a recent statement.

"Our climb in the rankings for Most Liveable City reflects the welcoming nature of our city, its affordability and the opportunity offered to entrepreneurs.

"We are exuding optimism and inviting people to join us in shaping our future."

In a statement, Brad Parry, president of Calgary Economic Development said that an "important aspect of the rankings is the focus on liveability for all citizens given economic challenges and it continues to be a focus for Calgary."

Home to the world's tallest mural

Parry also added that "this ranking is an acknowledgement Calgary is a great city for people to make a living and a life as we help solve global challenges." 

And to top it off, Calgary also just became home to ‘the world’s tallest mural.'

 German Graffiti artist, Mirko Reisser has completed a mural that stands 310 feet, 9-inches tall, towering above the streets of Calgary's inner city.

It's located on the Eastern wall of Calgary’s First on Tenth building and was created as part of the 2022 BUMP Festival. 

Calgary has a competitive edge

So, as the country appears to be crawling out of the COVID-19 pandemic, Calgary is on the rise. Mainstreet's Dhillon cites Calgary's competitive edge as a key factor.

 "Most of all, we’ve got affordability," Dhillon told BIC, "which the rest of the big centers in Ontario and B.C. don’t have.”

Dhillon added:  “One of the most unique things about Calgary is the lack of a glass ceiling. It’s not about who your father is or which private school you went to. Here you can have access to everybody and anybody. Because of this open culture and the ability to create entrepreneurs.”