Why the Difference between Calgary and Edmonton Homes?
Calgary and Edmonton provide one of the best rivalries here in Canada. There are few better hockey games to watch than Calgary playing Edmonton (although we’d take anything right now) and while Calgary is more developed and has larger infrastructure, Edmonton has West Edmonton Mall. But when it comes to Calgary mortgages and Edmonton mortgages, these two cities used to be fairly neck-in-neck. Now the tides have turned, and Calgarians have one more thing to boast about – better home values.
A look at the above chart clearly shows the differences between the two cities, and how Calgary takes the cake every single year for highest home values. Even in 2011, when home prices in both cities took a hit, Calgary still came out the winner. But you can also see from the chart that back in 2009, the differences in home values between these two cities was quite slight. Now with each passing year, that gap gets wider and wider.
Lai Sing Louie says there are many reasons; one being that Edmonton simply didn’t bounce back from the recession as quickly as Calgary did.
“It’s significantly higher,” Mr. Louie says. “Calgary has come back more so than Edmonton has since the economic downturn.”
Of course Calgarians are willing to pay more for their home, too, says Mr. Louie. And this is especially true right in Calgary’s inner city, where a trend is occurring right now of tearing down old derelict buildings and replacing them with new, modern homes.
“Calgarians like to move-up buy,” he says. “If you look around, there are lots of more expensive homes being bought by people in Calgary. That’s happening throughout the inner-city.”
But why is that? Are the people in Calgary simply richer than the people in Edmonton? Or are there external factors that are pushing prices higher in the southern city? Richard Coatcher of Canadian Home Builders’ Association says it’s a mixture of both.
“Incomes are higher and buyers can, on average, carry more mortgage debt and therefore can pay more. In Edmonton, the market is fairly balanced with a good supply in all quadrants,” says Mr. Goatcher. “Calgary, I believe, has a less generous supply of new single detached lots which maybe put more upward pressure on price.”
And the way Calgary is expanding, that supply is becoming less and less. And that will probably apply more pressure, and cause prices to go up even further as demand continues.