The Great Migration: Why Albertan Real Estate is Booming

Credits: Why are all your friends moving to Alberta? New report has some ideas

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Tax Policies and Housing Prices Drive Inter-Provincial Shift

A recent report by Re/Max Canada sheds light on a notable trend in the Canadian real estate market: inter-provincial migration is on the rise, with Alberta emerging as a prime destination. The 2024 Tax Report highlights how factors such as housing prices, taxation policies, and job opportunities are reshaping migration patterns across the country.

The Shift to Alberta: A Magnet for Homebuyers

According to Re/Max Canada's findings, close to 60,000 Canadians moved to Alberta, Nova Scotia, New Brunswick, and Prince Edward Island in 2023, with Alberta absorbing the bulk of this inter-provincial migration. In the first three quarters of 2023 alone, Alberta welcomed over 45,000 new residents from other provinces - more than double the number from the same period in 2022.

The inflow was driven primarily by migrants from Ontario (6,262), British Columbia (5,269), Saskatchewan (1,579) and Manitoba (1,316). Alberta's lack of a land transfer tax, coupled with relatively affordable housing prices compared to markets like Vancouver and Toronto, has turned the province into a powerful draw.

Impact of Taxation on Homebuying Decisions

"For first-time buyers, it's an opportunity to get into the market at an affordable price point and gain equity, as opposed to paying down someone else's mortgage by renting," said Re/Max Canada president Christopher Alexander.

The report underscores the significant impact of taxation policies like the land transfer tax on homebuying decisions across generations. A Leger survey found that over a quarter (28%) of Canadians attributed their housing market participation decisions to the land transfer tax. This sentiment was even more pronounced among younger buyers, with 40% of Gen Z and 35% of Millennials expressing concern about the tax hampering homeownership goals, compared to just 21% of Baby Boomers.

Fleeing Unaffordability in BC and Ontario

The report suggests a continuation of the exodus from provinces like British Columbia and Ontario towards Alberta, a pattern that accelerated during the COVID-19 pandemic. In the Greater Vancouver Area, where average home prices and land transfer taxes are highest among the major markets studied, the high cost of living was cited as a key factor driving residents out of the province.

While the earlier BC trend was to move to more affordable markets like the Okanagan region, strong in-migration to cities like Kelowna and Kamloops has driven up housing values there as well. Similarly, the Toronto market has seen heightened demand and pricing at the luxury end due to proposed land transfer tax changes, even as overall activity has slowed.

Opportunities in Alberta's Multifamily Market

As Alberta continues absorbing inter-provincial migrants, investors have a lucrative opportunity to capitalize on rising rental demand by acquiring multifamily assets like apartment buildings or rental condominiums. Markets like Calgary, which boasts affordable housing and ample job opportunities, could be particularly smart plays.

Prospective buyers priced out of homeownership in their current markets may find the path to building equity as a landlord in Alberta to be more achievable. With sustained population inflows forecasted, multifamily investments could generate stable cashflows and robust appreciation.

Want To Learn More?

Exclusive Webinar Invitation:

Speaking of opportunities, I'm thrilled to extend a personal invitation to you for an upcoming webinar that dives deeper into the real estate and private capital marketplace in Western Canada. Presented by Axcess Capital Advisors in partnership with Legacy Investment, this webinar promises to shed light on the lucrative prospects awaiting discerning investors.

Join me, Adrian C. Spitters, along with other industry experts, on Wednesday, April 3rd, 2024, from 4 PM to 5 PM MST (6 PM to 7 PM EST). Together, we'll explore Legacy Investment's property portfolio, growth strategies, and forthcoming acquisitions, providing valuable insights into the Western Canadian real estate market.

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I look forward to sharing this enriching experience with you as we uncover opportunities awaiting in Western Canada.

To learn more about the opportunities to invest in Alberta multifamily rental real estate, register above or contact me at [email protected] or use my Calendly Link.

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