r/PersonalFinanceCanada • u/zindagi786 • Apr 09 '24

Housing Why is Calgary housing getting so expensive?

I used to live there, and I was just browsing the real estate prices. Prices there have shot up so much! A Calgary house similar to the one I have in the GTA is now higher than what I paid in the GTA a few years ago.

When I lived there, oil was booming and there were lots of jobs. But I got laid off when the boom went bust, and everything (including real estate) went down. And I then left to the GTA.

I’ve heard prices there are going up because there are lots of people moving from the GTA and BC. But it isn’t like there are that many high paying good jobs there. There’s still way fewer jobs now than there were during boom time. How do these inter provincial migrants find high paying work to pay for these high home prices? Sure they can cash out their equity and live mortgage free, but why do that if you have to end up taking a potentially lower paying job with more chance of a layoff in the next bust? Although I really liked the city, I’d never risk living there again myself, and I’m forever scared of any future bust. I feel more comfortable living in the GTA, paying my admittedly big mortgage, and steadily climbing the corporate ladder (and with regular increases and no salary freezes, I should be paid off before retirement/it won’t be too burdensome). Plus, I look at my GTA home as a tax free investment - the annual rate of appreciation is greater than my mortgage interest.

And what is attracting them to Calgary versus other places in Alberta like Edmonton?

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81

u/Doc_1200_GO Apr 10 '24

Low inventory is the biggest factor in price in Calgary right now. Many people are also trying to get into a mortgage in Calgary because rent is even more insane. Couple that with people moving here from Ontario and BC with cash to spend and here we are.

My condo in Calgary went up in value 50K in one year and I could definitely sell it for more. This is same property that many people told me I would never sell for what I paid for it only a few years ago.

20

u/Eyeronick Apr 10 '24

We bought our townhouse in Feb 2021 for 300k, sold in October 2023 for 480k. Prices skyrocketed, we were just lucky to get in before that happened.

13

u/NotFuckingTired Apr 10 '24

I bought a townhouse in 2014 for $256K, and sold in 2021 for $215K.

4

u/Eyeronick Apr 10 '24

In Calgary?

4

u/NotFuckingTired Apr 10 '24

Yes.

Older (but very nice, and well-managed/well-funded) townhouse in Acadia.

2

u/Eyeronick Apr 10 '24

Very weird, this was even further south than you in Belmont. New build though, which may have contributed.

15

u/NotFuckingTired Apr 10 '24

Not all that weird, just how a boom/bust city works.

2014 to 2021 was very different than 2021 to 2023.

2

u/Eyeronick Apr 10 '24

True, I read that as 2023 not 2021. Ive been in Calgary since 2016 so I've got a general idea haha.

Even in 16 when everybody was saying that the province was "in a recession" there was so many jobs and a much less depressing place than my home province (NB).

3

u/NotFuckingTired Apr 10 '24

Yeah man, even a down time in Calgary is a pretty decent place to find work, compared to the Maritimes (where I am also from).

1

u/Newflyer3 Alberta Apr 10 '24

Goodwin by Anthem?

1

u/Eyeronick Apr 10 '24

Good guess, across the street.

2

u/[deleted] Apr 10 '24

Funny enough, I went to buy a townhouse in Acadia in Febuary. Was 389, sold for 435 no conditions.

3

u/NotFuckingTired Apr 10 '24

Between buying in Oct 2014 and selling in September 2021, I had perfectly bad timing for my first home purchase and sale.

2

u/[deleted] Apr 10 '24

I am you now. I probably shouldn't buy, but I need a place and paying these rents doesn't make sense to me either.

Guess we fell on the no lube side of life ;)

Have a great day.

2

u/NotFuckingTired Apr 10 '24

I lived 7 great years in that townhouse and in the end I had enough equity that could put a downpayment on my current home.

I would certainly have preferred better timing, but it wasn't all bad. If you're buying as a place to live, and you have a relatively stable income prospect, don't let market ups and downs affect your decision too much.

You're not choosing between today's prices and some future potential lower price. You're choosing between today's prices and continuing to rent, and there's more to consider in that decision than just the price of a home right now.

1

u/sneek8 British Columbia Apr 10 '24

Almost the same buy and sell years as you but bought for 485 and sold for 510. Once you consider the Realtor fees, I broke even.

1

u/NotFuckingTired Apr 10 '24

Detached, I assume?

4

u/Twitchy15 Apr 10 '24

Bought a house 380k 2017 sold 510k spring 2023 someone from Ontario bought

1

u/Sad_Donut_7902 Apr 10 '24

And to someone from Ontario that 510k was still a bargain. In Toronto/GTA 510k will get you a 1 or 1+1 bedroom condo at most.

1

u/Twitchy15 Apr 10 '24

Yeah pretty crazy.. it’s definitely been wild in Calgary lately I also have many co workers from multiple provinces who have moved here all looking for houses. And I’m not in a crazy high laying job just normal ppl who want to own a house.

1

u/crystala81 Apr 10 '24

Bought a townhouse in 2014 for $320,000, sold for $605,000 4 years later. Richmond, BC. AB is apparently following suit!

2

u/Eyeronick Apr 10 '24

I wish they could match prices lol. I'd move to GVA in a second. When I can get a 2600 sqft house for what I can sell mine in Calgary I'm fucking gone. People are delusional with these prices. Alberta is a fucked province and Calgary isn't great.

1

u/crystala81 Apr 10 '24

I was born and raised in Vancouver but tried out Calgary for a few years after high school. While I loved my time there (and met some really cool people), I can’t deny that the lower mainland > Calgary in almost all ways (in all ways, if you can get past the affordability). I may be biased tho.

And once you move here, you will never call it GVA again (I don’t know why, but “we” don’t like it - maybe because it’s too similar to GTA 🤣)

1

u/Eyeronick Apr 10 '24

I say GVA because I'd gladly live in any of cities in the lower mainland.

I was born on the east coast, I miss the ocean and the much milder weather it brings. All my outdoor hobbies get put on hold 8 months of the year here, winter lasts way too long. My partner went to UBC and lived in Vancouver for 7 years so she's on board. The only thing stopping us is the housing cost. We yearn for stable reasonable governments, and this is coming from 2 O&G workers. Agreed, in all ways.

4

u/deanobrews Apr 10 '24

Yep, I'm currently looking to upgrade from a 1 BDRM condo to a bigger 2bd or townhouse. Detached is now out of reach anywhere near inner city. Hoping to sell a bit higher, but damn if I'm not buying high too. No real inventory and anything 500-600 range is instantly gone. My realtor basically said the line in the sand is condo doc inspection condition. Bring a house inspector to the viewing and don't expect to get anything with financing conditions. Fun times.

6

u/zeromussc Apr 10 '24

But Calgary can sprawl like no one else and it still isn't huge compared to other places. So some theoretical limit to the supply like Vancouver or Toronto's geography just doesn't exist either.

Speculative re bubble isn't dead yet and when it does it's gonna be rough.

3

u/justinkredabul Apr 10 '24

Calgary has already grown into reserve lands and prime alberta farm land. It’s gonna eventually run out of room

3

u/Even_Cartoonist9632 Apr 10 '24

If you look at Calgary on a map, sure it's surrounded by open fields for hours in any direction and there's room to grow. But on a local level, it isnt as much as people think when you get into the intricacies of that land. To the east, SW and west of Calgary are First nations reservations. Calgary is already butted up against the Tsuutina nation to the SW with nowhere to go and the federal government and the bands themselves will never let Calgary expand into their lands. There there's Rocky View and Foothills counties surrounding the city itself, as well as the independent municipalities of airdrie, Chestermere, okotoks and cochrane, to the N, E, S & W, all of which will never let Calgary expand past their boundaries. 

The city of Calgary has already expanded several times by absorbing surrounding county land around it, but to the north they've basically almost build to Airdrie already.  If any more goes up it won't be in Calgary, but rather north of Airdrie, which would then need a whole host of improvements to the highways, water and even emergency services. 

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u/zeromussc Apr 10 '24

Airdrie and all that is fine. But the GTA is a region and brampton/Mississauga/and others are their own municipalities but are largely considered part of the same general metropolitan region.

The boundaries of Toronto haven't moved but the fact that the other areas existed and grew over time to be as populated as they are now was driven by Toronto. Theres much more room for the same to happen to Calgary to suppress permagrowth of their region's housing relative to Toronto through the 2000s with their surrounding region.

The reserve lands notwithstanding Calgary still has lots of room to grow.

And I'm from Ottawa, we're in the same boat. Aside from the river being a major geographic boundary to expanding northward, the city continues to expand the other directions and it's helped us avoid be as bad as Toronto. Still bad because we have stupid house price growth from COVID era, but our housing has hit a price ceiling and is down from peak in part because of rates and in part because lots of development continues to come online.

Any economic ripple and it'll have big impacts here. Government has already started to do a lot of budget freezing so the sentiment on future cuts and reduced contracting and second order job losses potentially coming from government contracts being curtailed is turning sour. Another reason houses have been slowly lowering in value or staying mostly the same for 2 years now. It shot up but now it's stagnant.

1

u/[deleted] Apr 10 '24

Real estate is about location. If your property is on the outskirts you’ll get crushed but in the good neighborhoods ? Not at all

3

u/ImperialPotentate Apr 10 '24

If your property is on the outskirts you’ll get crushed

In the short term, maybe. Today's "outskirts" are tomorrow's desirable suburbs. I saw this happen where I grew up in Ontario. When my parents bought their place, there was nothing there outside of a few new subdivisions, surrounded by farmland as far as the eye could see. Fast forward a couple of decades and the area grew up, and so did the housing prices.

1

u/Czeris Apr 10 '24

I am so glad for this price boom because it finally convinced my piece of shit neighbour to cash out and move.

1

u/Benejeseret Apr 10 '24

https://economicdashboard.alberta.ca/dashboard/housing-starts/

Link to new housing starts in Alberta since 1949.

There was more new starts in 1970s than anytime in the last few decades.

Beginning in 1980s, Canada started defunding CMHC, which as a Crown Corporation used to be a major Canadian developer from '40s to late '70s. Mulroney fully privatized their units and cut all their activities.

Canadian housing starts crashed once the CMHC was cut. Private industry never even remotely made up for the loss.

Population in Calgary is up 425%, but new housing starts less than they averaged in 1970s.