Ontario and BC have long been a hotspot for real estate investors.
According to the Canadian Real Estate Association (CREA), Ontario's housing market has experienced significant growth over the past 10 years. From 2011 to 2020, the average residential sale price in Ontario increased by approximately 130%, from $363,908 to $837,804. This represents an average annual growth rate of approximately 9.6%.In recent years, Ontario and BC homebuyers and investors have been looking beyond the province's borders and turning their attention to Alberta.
The Alberta real estate market has experienced some ups and downs over the past decade. In general, the growth rate has been relatively modest, with a few years of decline. However, in the past 2-3 years, Alberta has become an attractive place to own and invest in Real Estate.So, what's driving this trend?
Become Alberta Real Estate Investors: Alberta is still affordable
One of the main reasons Ontario residents are turning to Alberta is affordability. The cost of living in Ontario, particularly in major cities like Toronto and Ottawa, can be prohibitively high for many people as home price appreciation has far exceeded growth in household income.In contrast, Alberta's real estate market hasn’t grown in such proportions as Ontario or British Columbia. Alberta offers more affordable options for homebuyers and investors alike. In fact, as of February 2023, the average home price in Calgary was $506,685 , while the average home price in Toronto is $1,071,043 . For Alberta Real Estate Investors, it’s clear that your money goes much further in Alberta when it comes to affordability.
Booming Alberta Economy
Another reason for the influx of Ontario and BC residents into Alberta is the province's booming economy. The oil and gas industry is a giant factor in Alberta’s economy, with mining and fossil fuels accounting for nearly 26 per cent of Alberta’s GDP in 2020. However, Alberta has done a great job diversifying from the heavy dependence on a fluctuating oil and gas industry, with recent growth in the renewable energy and technology industries. With many job opportunities in these sectors and a staggering growth in remote work, Alberta has become an attractive place for skilled professionals from all sectors.This strong economy has created a high demand for housing, which has driven up property values and made real estate investments in Alberta more attractive. Alberta Real Estate investors see Alberta as a great place to invest in real estate due to its strong job market and steady population growth.
Quality of Life
Alberta is also known for its quality of life. The province is home to some of Canada's most stunning natural landscapes, including Banff National Park and Jasper National Park. These areas offer a wide range of outdoor activities, such as skiing, hiking, and camping, which are popular with residents and tourists alike.In addition to its natural beauty, Alberta is also home to vibrant cities such as Calgary and Edmonton, which offer a range of cultural and entertainment options. The province's low crime rate, high standard of living, and friendly communities make it an attractive place to live for many people.
Lower closing costs
Buying Real Estate in Ontario and British Columbia has long been subject to hefty taxes and closing costs. For example, purchasing a $1M property in the City of Toronto will run you a cool $32,950 in land transfer taxes alone.Alberta’s land titles fees are significantly lower than Ontario and British Columbia. The Land Transfer Registration Fee in Alberta costs a base of $50 and an additional $2 for every $5000 of property value and the Mortgage Registration Fee also costs a base of $50 and an additional $1.5 but for the mortgage amount. For simplicity, on a $500K property in Calgary, you’ll pay $350-$500 in Land Titles fees. A huge difference from what you would pay in Ontario.
Diversified Real Estate Portfolio
Diversification Another reason for the increasing interest in Alberta's real estate market is diversification. Many Ontario residents are looking to diversify their real estate portfolios by investing in properties in other provinces. This can help protect against market fluctuations and mitigate risk.Investing in real estate in Alberta can provide a stable, long-term investment option for those looking to diversify their portfolio. Alberta's growing economy and strong job market make it a promising market for real estate investments, while its affordability makes it accessible to a wide range of investors.
The Bottom Line
There are many reasons why Ontario residents are turning to Alberta's real estate market. The province's affordability, booming economy, quality of life, diversification potential, and potential for high returns make it an attractive option for both homebuyers and investors.If you're an Ontario resident considering investing in Alberta real estate, Deeded can help you save on your closing costs by eliminating the traditional travel required in order to sign your closing documents in Alberta, through our virtual closing platform.Contact us to learn more.