Edmonton and Calgary, two major cities in Alberta, Canada, share several similarities, but their housing markets have taken different paths. While Calgary’s house prices have reached record highs in 2023, Edmonton’s market has remained stable. This divergence can be attributed to several factors.
- Supply and Demand: Calgary’s housing market has seen significant price increases due to strong demand driven by interprovincial and international migration. In 2022, Alberta’s population increased by approximately 119,000 people, with nearly a third settling in Calgary. Edmonton, on the other hand, has had a more stable housing market due to its diversified economy, which includes government, healthcare, postsecondary, wholesale retail, and “grey collar” oil and gas sectors. Calgary’s entrepreneurial and high-tech growth has contributed to its higher housing demand.
- Economic Differences: Calgary has become a magnet for talent in the tech and energy sectors, attracting firms looking for affordable cities with a skilled workforce. The city’s economy offers opportunities for growth, making it an attractive destination for job seekers. Edmonton’s economy is driven by government, healthcare, and other sectors that provide stability but may not experience the same rapid growth as Calgary.
- Supply Shortages: Calgary experienced supply shortages in its housing market, leading to rapid price increases. In contrast, Edmonton had better supply management, with more months of supply available. A robust stock of purpose-built rental units in Edmonton also helped divert population growth away from the resale market.
- Housing Starts: Housing starts in Edmonton dropped by approximately 40% in the second quarter of 2023 compared to the same period the previous year. If this trend continues, it could limit supply and drive price growth in the resale market.
Despite the differences in their housing markets, both cities continue to attract newcomers, especially from Ontario. These migrants, less price-sensitive than local residents, may be willing to pay higher prices for homes in Alberta’s major cities. However, future developments in housing supply and demand will continue to influence price trends in Edmonton and Calgary.