Here’s how the real estate market in Alberta is trending in 2023.
Canada’s 4th most populated province, Alberta is home to some of the most picturesque views in the country, and Canadians are flocking to live there. Calgary and Edmonton are the two main cities in Alberta, and both are popular destinations for inter-provincial as well as international migrants, with plenty of job opportunities and all the amenities that a city has to offer. For those that prefer a quieter lifestyle, Alberta is also popular among rural homeowners, with plenty of outdoor activities and access to the stunning Rocky Mountains in the west.
Let’s take a look at how the real estate market in Alberta is doing going in 2023.
Calgary real estate market stats
Alberta’s population grew by 160,000 last year, with most of the provinces new residents settling in Calgary. Home to the Calgary stampede and close enough to drive to stunning views in Banff national park, Calgary has been a hot destination for Canadians moving from higher cost of living areas.
The average residential price of a home in Calgary is $567,700 as of July 2023, representing near all-time-highs for the city.
As inflation continues to slow and the Bank of Canada stops raising interest rates, we can expect to see the average price of a home in Alberta continue to rise at an even faster pace as new housing supply lags behind population growth.
Edmonton real estate market stats
Unlike Calgary, the real estate market in Edmonton hasn’t seen as much appreciation over the past year. The residential average price in Edmonton is $381,800 as of July 2023.
While still facing increasing population due to migration, Edmonton’s real estate market isn’t nearly as hot as Calgary’s, likely due to decreased demand to live in the city.
How does the mortgage market affect housing prices in Alberta?
With the Bank of Canada increasing rates rapidly over the past year, we’ve seen firsthand the impact that the mortgage market can have on the price of homes. When interest rates rise, mortgages become more expensive, leading to less buyers being able to qualify for a mortgage, and decreased demand for borrowing. When less people can afford their mortgage, less people buy homes, and so the demand for homes decreases which has a negative impact on the price of homes. This played out in real time recently as the benchmark price of homes decreased sharply as interest rates went up.
Why are home prices in Alberta going up?
While Ontario and British Columbia have seen the average price of homes decrease over the past year due to rate hikes from the Bank of Canada, Alberta has weathered the storm and seen rapid gains, particularly in Calgary. The most likely reason for this is that while high prices and volatility in Vancouver and Toronto lead to less mortgage demand, in the relatively more affordable market of Calgary buyers are still able to afford to take on debt and purchase homes at a rate higher than that of in more expensive cities.
Like any market, the housing market in Canada is primarily a function of supply and demand. When the demand for homes increases relative to the supply, the price will increase. Alberta has seen record population growth recently due to both international migration and inter-provincial migration as some Canadians are moving to Calgary in search of a more affordable housing market with the same city lifestyle they’re used to.
Recommended reading: Why is housing so expensive in Canada?
According to a report by Scotiabank, Alberta is one of three provinces with less housing per capita than the national average in the country. In order to make up the deficit, the report says, Alberta would need to build a surplus of 138,000 homes just to bring it to the same level as the rest of Canada.
Where is the cheapest place to live in Alberta?
Calgary and Edmonton remain the most popular cities in Alberta to live, however like other provinces, more affordable housing can be found in smaller towns.
Houses in Sylvan Lake, west of Red Deer, have an average price of $499,000.
Southeast of Edmonton, Camrose has a benchmark price of $443,000.
The average price of a home Lethbridge is just $342,520.
There are also countless rural towns and communities with even cheaper benchmark prices. As a general rule the further away from major city centers like Calgary and Edmonton you go, the cheaper prices will get. However, even small towns in desirable destinations like Canmore and Banff are usually priced well above the provincial average.
Of course these cheaper areas are cheaper for a reason. The demand for housing in remote areas of Alberta is lower because of factors like infrastructure and access to jobs.
Alberta local real estate market outlooks:
Check out what our realtor partners are saying about the housing market in these cities in Alberta: