SAFE AS HOUSES? // RECREATION & INVESTMENT REAL ESTATE
Juwai posted a glowing article touting Calgary – and Alberta generally – as a more attractive alternative to Vancouver, citing affordability, lifestyle draws and Hainan Airlines’ then-new non-stop connection between Calgary and Beijing (which, together with Air Canada’s Tokyo-Calgary non-stop flight, is transforming Alberta’s busiest airport into a new Asia-Pacific hub). Moreover, observers have hinted that Alberta’s cities, with real estate markets still soft in the aftermath of the province’s most recent downturn, would welcome such a shot in the arm of foreign capital into its real estate markets. “They would actually be welcomed here in Alberta,” says Todd Hirsch, chief economist at ATB Financial. Welcomed, perhaps, but not particularly likely in the near future, say the province’s real estate experts. “From what I’m seeing, we’re not dealing with a lot of foreign investment here in Edmonton, or in Alberta generally,” says Bill Briggs, owner and Realtor with RE/MAX and regional director for Alberta on the Canadian Real Estate Association’s (CREA) board of directors. “There are certainly foreign nationals buying property here, but in contrast to Vancouver and Toronto, where people are using properties as a means of moving money out of the country, people who are buying here are actually looking to settle here.” Briggs contends that the pricing structure in Edmonton (as well as Calgary) is simply not optimized for foreign investment on the scale of what has been seen in these larger cities. Unlike Vancouver, where $1 million-plus properties are the rule rather than the exception, Edmonton simply lacks both the international profile and the proliferation of high-priced real estate necessary to fuel such growth. Even Calgary, Briggs asserts, is unlikely to see a major uptick in foreign investment in spite of the city’s growing international profile. “I can only imagine this happening in places like Canmore, where you have a lot of expensive recreational properties. Otherwise I really don’t think you’re going to see this happen in Alberta.” He adds that certain areas in Edmonton, such as the neighbourhoods surrounding the University of Alberta,
may well see noticeable increases in foreign purchasing, particularly in light of the new taxes in British Columbia and Ontario, but that such purchases will overwhelmingly take the form of “legitimate” housing purchases focused on children’s education, if not full-fledged migration. Don Campbell, senior analyst with the Real Estate Investment Network (REIN), concurs with Briggs’ assessment of Edmonton’s real estate scene. “Edmonton’s market is different. It does not attract anywhere near as large of a percentage of foreign investment as Vancouver, Toronto, or even Calgary. The Edmonton market is more driven by market fundamentals, which dictate the direction of the local housing market more than anything else,” says Campbell. “Edmonton also has extra protection against high volatility thanks to its role as capital city and a centre for government hiring and spending. This helps to support and buffer the GDP during economic downturns that other cities in the province, like Calgary, have recently experienced.” Campbell adds that what investment there has been in the province’s cities – and that which is likely to occur – is starkly different from the sort that transformed Vancouver and Toronto into residential real estate basket cases.
ABOVE: BILL BRIGGS, ASSOCIATE BROKER, OWNER / MANAGER, RE/MAX REAL ESTATE - CENTRAL BRANCH
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APRIL 2018 // BUSINESS IN EDMONTON // BUSINESSINEDMONTON.COM