In recent years, the city of Calgary has been doing much to contend with the notion that it is a city purely at the whims of the oil and gas market. Recent efforts towards diversification are making the city an increasingly attractive choice for families and investors. With recent gains in emerging industries like Information Technology, Calgary is preparing itself for a new era of prosperity.
Recently, Amazon announced it would be establishing a cloud computing hub near Calgary that hopes to bring billions of dollars of investment to the region. This follows other large tech companies such as Mphasis and Infosys that have established themselves in the city. In addition, the city hopes to expand in sectors such as agribusiness, creative industries, and financial services.
We spoke to Natasha Phipps, a top local realtor and founder of the Phipps Real Estate Group, about what diversification may mean for Calgary, its residents, and real estate investors.
“The diversification of Calgary is something that has been needed for a very long time,” said Phipps. “The benefit of diversifying is firstly, more stability. From a real estate perspective, the market in Alberta and Calgary has been very cyclical. The hope is that diversification can bring more consistency to the market.“
While attracting new industries to Calgary may be crucial, it does have numerous benefits in place for businesses that may make it an appealing choice. Phipps highlights the abundant space for industrial and office property, something that cities like Vancouver have been struggling to provide. As well, Phipps highlights the “very attractive workforce” in the city that is ready to take on the challenge of a shifting economy.
“We’re a very young and well-educated city, with an entrepreneurial spirit. That combined with Alberta’s tax advantages makes Calgary a great home for many blooming businesses.”
For Canadian’s attracted to Calgary by one of its emerging sectors, there is even better news in the area of affordability. Not only does Calgary have some of the lowest home prices in any major city, but the province also reports some of the highest household incomes in the country. The city offers all the modern amenities that residents would expect of any major city, with much more approachable prices.
“Particularly for people buying their first home, they’ve been priced out of other markets. Even if you’re a retiree, you want your money to go further. So Alberta is a very attractive market for that fact alone. You can get into a single-family house here for the price of a two-bedroom condo in other major cities.”
In November 2021, the benchmark price for a condo in Vancouver cost $752,800, far higher than the price of a detached home in Calgary for the same period at just $542,600. The disparity is not lost on home buyers: according to Stats Canada, over 30,000 people from Ontario and BC alone moved to Alberta last year.
Speaking on Calgary’s appeal to real estate investors, Phipps said that when it comes to the major economic indicators that investors look for, such as GDP and population growth, employment opportunities and infrastructure improvements, Calgary is checking all the boxes.
“And you get a great renter profile here because you’re getting people who have good well-paying jobs and who are looking to get settled in Calgary but are not necessarily in a position to be able to buy. Plus, you can actually obtain positive cash flow here, which is becoming harder and harder to do in the Canadian real estate market.”
According to Phipps, the suburbs of Calgary are the “sweet spot” for cash flow in multiple different property types such as detached houses, duplexes, and multiplexes.
“Another sector that has started to become interesting here again, in my opinion, is pre-sale condos. Pre-sale condos as a strategy work well in an appreciating market, but in the last five to ten years the condo market in Calgary has been almost flat or negative. Now the tide is finally starting to turn.
“So we’re starting to see presale condo construction projects make sense again. In these new developments, you can get that passive appreciation over the next four to five years while it’s being built and then have a really nice investment property at the end of that time as well.”
Looking forward to next year Phipps is optimistic for Calgary, expecting continued market performance and appreciation.