Despite economic headwinds creating challenges across the country, Alberta is uniquely positioned for growth in 2023, according to a report from Zonda Urban.
Alberta is forecasted to record two percent real GDP growth in 2023, leading the country, tied in first place with Saskatchewan.
As rising interest rates and stubbornly high inflation continue to erode purchasing power across the country, the relative affordability of Alberta’s housing market is a major draw for people priced out of other regions.
This, along with robust employment prospects, is creating and sustaining momentum in inter-provincial migration, a trend which is expected to continue.
Oil production in particular is contributing to economic growth. Production is ramping up as oil prices hover above the five-year-average and the Trans Mountain Pipeline expansion is on track to be completed in 2023.
Agriculture is also playing a key role in the province’s economic growth, according to Zonda Urban, with the sector reporting a record year in 2022.
To put it in context, agricultural realized net income rose to a historic high of $3.3 billion in Alberta in 2022. Meanwhile, on a national basis, agricultural realized net income fell by 10 percent.
Growth in the rental, housing and labour markets is expected to continue thanks to historic levels of inter-provincial migration and sustained overall population growth.
Demand for purpose-built rental product continues to climb, particularly in Calgary and Edmonton. Rental rates in Calgary increased by $0.10 per square foot to $2.70 per square foot on a quarterly basis, while in Edmonton average rental rates went from $1.85 per square foot to $1.91 per square foot.
Thanks to a number of new project launches, overall vacancy rates increased slightly.
In the multi-family market in Calgary, the average unit price across all product types went up by 1.1 percent to $427,138 in the first quarter of 2023. Edmonton also registered an increase of 1.1 percent in average multi-family unit prices across all product types.
While overall housing starts were up in the Calgary and Edmonton markets combined by 10 percent year-over-year, they fell by 21 percent in Calgary and 40 percent in Edmonton on a quarterly basis.
Calgary’s new multi-family home market was robust in Q1 2023, with the second-best sales figures on record, as local buyers have re-engaged in the market.
Notably, townhome sales in Calgary went up by 146 percent in the first quarter of 2023, with condominium sales above average as well.
Much of the inventory introduced to the market in the first quarter was absorbed with an uptick in sales, holding the line on market conditions, although new multi-family inventory levels are up 51 percent year-over-year in Calgary, according to Zonda Urban.
