According to the Canadian Real Estate Association (CREA)’s monthly snapshot, the average housing price in January 2023 continues its trend of consistency; The average purchase price of a home in Calgary is currently $509, 900, whereas the average cost in Toronto is $1,078,900.
This means that investing in a property in Toronto will cost you, on average twice as much as it will in Calgary. The other interesting point about this statistic is comparing it with the same time in the preceding year: Calgary’s value has increased by 6.1%, notes CREA, whereas Toronto has decreased in value by a whopping 14.2%.
This is a good place to start the discussion on why putting your money in Calgary in this market is a strategically prudent decision for investors.
The Calgary market is not immune to the national or global trends impacting the real estate market, but it is, arguably, better reinforced. Consequently, those earthquakes that we’re seeing the City of Toronto have to weather are mere impact tremors in Calgary. They’re present but not nearly as calamitous as the impact currently being felt in Toronto.
This is just one of many reasons why Calgary is a potential investor goldmine.
A high number of people are moving their money from Toronto to Calgary, as noted in CBC.ca’s December 2022 piece entitled, Why Ontario buyers are scooping up investment properties in Calgary.
We reached out to Jesse Davies,Calgary REALTOR ® and leader of the Jesse Davies Team for his take on real estate investment dollars moving from Toronto to Calgary. With over 15 years of experience, he is poised to offer us insight into real estate investment trends.
“Calgary is buzzing we are receiving weekly calls from investors and buyers looking to invest in Calgary’s affordable real estate market or make Calgary their new home. With the high-interest rates the rental market is extremely tight and prices are increasing weekly as demand is high and supply is low.”
If a landlord isn’t asking if the above trend has longevity, there’s something disconnected. But the answer to the question is a resounding yes.
Calgary (YYC) has done a lot of think-work to establish itself as a niche market. There has been an injection of funds provincially and at the municipal level to ensure Calgary provides the total solution; not just as a place of the industry but as a well-rounded, lifestyle-oriented place to live.
Calgary is touted as the world’s third most livable city. Calgary offers all the kinetic energy and diverse vibrance of a large metropolitan city with the warm and welcoming vibe of a connected community.
Climate-wise, YYC enjoys more sunshine days (on average 333 per year) per year than any other Canadian city. While the city can’t take credit for the blessings of Mother Nature, it can get props for maximizing the opportunities that she provides.
Calgary has one of the most extensive outdoor pathway and bikeway networks in North America.
It’s also home to over 1000 kilometres of paved multi-use pathways and dozens of communities are linked by this artery-like system. The city also has another 290 kilometres of on-street bikeways, including dedicated, downtown bike lanes.
In speaking of transit, the city’s public transit system serves its community well with over 118 kilometres of light transit system (CTrain) and 46 stations.
Calgary has a long-standing reputation as the centre of Canada’s national energy industry. However, recently, Calgary, and specifically an organization called Calgary Economic Development, has built a new claim to fame for the city as a mega tech hub for Canada, and as a cultivator of budding entrepreneurs and future-forward problem solvers.
The living conditions of a community are what draw, or conversely repel consumers. The livability and incredible transit contribute to Calgary’s high standard of living. This quality of life, in turn, serves to draw potential tenants.
This could spell a more plentiful and well-rounded tenant pool upon which a landlord can draw. With Calgary’s focus on livability, the median age of the tenant pool is also better for landlords and there’s more opportunity for a lengthy, and by extension, improved tenancy. This better quantity and quality of tenants lead to a better return on investment.
We asked Mr. Davies what Calgary’s livability means to landlords and investors. Here’s what he shared:
“Calgary had received numerous top 5 awards for most livable cities in the world. Calgary experiences the sunniest days in all of Canada and its proximity to the mountains makes it an attractive destination for the outdoor enthusiast. The city offers amazing schools, public transportation and family-orientated communities with lakes, walking/biking paths for families and dog owners.”
Buyers in Alberta don't face land or property transfer taxes as they would in other provinces.
In British Columbia and Ontario, these taxes run between one and three percent of the final sale price of properties. Toronto properties are subject to both a provincial and municipal land transfer tax. On the average $1,078,900 Toronto property mentioned earlier, that could mean a whopping $32,367.
Unlike other major urban centres across the nation, Calgary also has no added provincial sales tax (PST), making goods and services (like those of lawyers or REALTORs ®) so much more affordable.
This is heavily praised for keeping more money in the consumer’s pocket rather than contributing to the government’s general reserve.
Here is a total Sales tax comparison snapshot as some food for thought:
* Alberta: 5%
* British Columbia: 12%
* Ontario: 13%
We asked Jesse for his thoughts on the solidity of the economic outlook as it relates to Calgary-bound investors. Here is his perspective:
“When we speak with investors from other provinces, they are blown away by the minimal closing costs associated with purchasing in Calgary. It makes for attractive investment opportunities and cash flow scenarios.”
One major critique of the Ontario Landlord Tenant Board is the disproportionate weight it gives to the tenants. According to the critics, this makes landlords unduly vulnerable and unable to protect their assets.
One major benefit for investors of residential real estate in Alberta is its tenancy laws. With what some may call a more balanced approach, housing legislation can be seen as beneficial to property investors. Alberta’s Residential Tenancy Act supports landlords to a much greater extent than elsewhere in Canada.
As evidence of this, some point to the absence of a cap on rent increases. Calgary has no rent controls. Subsequently, there is no limit on the amount by which a landlord may increase the rent on their property. This is because rental rates are truly market-driven in Calgary; when supply is low, and demand is high, rental rates go up very quickly.
Calgary has proven to be a great draw for young families, active couples and retirees alike. As such, it’s a great draw for investors. And that’s been a strategic decision by the city of Calgary and, on a macro level, the Province of Alberta. While the livability of the city goes a long way to improve its green score over other cities, investors have other considerations that make up what is tantamount to a different, and very healthy green score.
Considering an investment into Calgary real estate? The Jesse Davies team can help you find the right place to put your hard-earned money, whether it be a pre-construction condo, a rental property, or a joint-venture initiative. Reach out to Jesse via email at [email protected].
When you flip houses, you are not usually intending to live in the house; rather the strategy is to sell the property as fast as you can so as to avoid paying taxes and other expenses on the property. While there will obviously be initial costs that you will need to budget for, house flipping can be done with few resources and little experience.
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