(May 29, 2023)
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In 2022, 28,232 British Columbians(BC) packed their belongings and made their way to (mostly) Calgary or Edmonton, a significant increase from the previous year when only 13,790 BC residents made the trek. This trend is expected to continue as the housing affordability crisis worsens in Greater Vancouver, where the current benchmark price for a single-family detached home is $1.9 million.
If you currently own property in Vancouver, the concept of selling high and buying low comes to mind when considering Alberta’s real estate market. In many instances, you can sell your current property in Vancouver and purchase a larger (and likely better) one in Calgary for significantly less. This can lead to a drastic reduction in your mortgage size or even the possibility of avoiding one altogether. For many, it can be a real and life-altering opportunity.
Here are some key points to be aware of if you’re considering a move from Vancouver to Calgary:
The price of real estate is significantly lower!
As of April 2023, the benchmark price of a single-family detached home in Greater Vancouver was $1,915,800. Meanwhile, in Calgary, the average price for the same property type is more than two times lower at $729,870, and even lower in Edmonton at $500,635 (almost four times lower!). Not only is the real estate cheaper, but it’s also likely newer – like decades newer!
There is no Property Transfer Tax in Alberta!
In BC, when you purchase a property, you have to pay a Property Transfer Tax (PTT) which is calculated based on the property’s value. This tax cannot be included in your mortgage proceeds and must be paid separately. In Vancouver, purchasing a benchmark-priced single-family home for $1,915,800 would also require an additional $36,316 for Property Transfer Tax. In Alberta, the equivalent fee is a registration fee of only $1,328.50.
The minimum down payment in Calgary is much more achievable compared to Vancouver!
In Canada, for purchases of $1 million or greater, the minimum down payment required to qualify for a mortgage is 20%. In Vancouver, where almost every single detached home is priced above $1.3 million, the minimum required down payment would be $260,000. In Calgary, down payments are much more manageable. For properties below $1 million, the minimum required down payment is 5% on the first $500,000 and 10% on the balance up to just under $1 million. So for an average-priced single-family detached home in Calgary, where the average price is $730,000, your minimum required down payment would be $48,000. In contrast, the average benchmark price of a single-family detached home in Greater Vancouver is $1,915,800, and the minimum down payment required would be $383,160.
There is no Foreign Buyer Tax in Alberta!
If you are new to Canada and have a valid work permit, you can purchase a property in Alberta without incurring the foreign buyer tax. In Ontario and BC, in addition to provincial Land Transfer Taxes, you must also pay the foreign buyer tax. So, for example, if you purchase an average-priced single-family home for $1.9 million, you would need a minimum down payment of $380,000 (20% of the purchase price) if you require a mortgage. Add to that the provincial Property Transfer Tax of $36,000 and an additional $380,000 for the foreign buyer tax (also 20% of the purchase price in BC…it’s 25% in Ontario!). Altogether, you would need $760,000 upfront to purchase a $1.9 million single-family home (which possibly requires some work). In comparison, a similarly sized home in one of Alberta’s major cities, Calgary or Edmonton, would start at around $600,000 (and very likely be larger and newer).
Your mortgage qualification goes a long way in Alberta!
There is a significant difference in the income required to qualify for a mortgage when purchasing a property in Calgary compared to Vancouver. Calgary’s lower housing prices relative to Vancouver mean that the income threshold needed to qualify for a mortgage is comparatively lower. With a more affordable real estate market, aspiring homeowners in Calgary can secure mortgage approvals with a relatively lower income level. On the other hand, Vancouver’s exorbitant housing prices necessitate a substantially higher income to meet the stringent mortgage qualification criteria. The soaring real estate market in Vancouver has resulted in a significant disparity in the income required for homebuyers, making it considerably more challenging for individuals with moderate incomes to enter the property market. To purchase an average-priced single-family detached home in Calgary, where the average price is around $730,000, a gross annual income of $160,000 and a minimum down payment of $48,000 would be required. If you increase the down payment to 20%, the required annual income to qualify for a mortgage would decrease substantially to $110,000. In contrast, the same scenario in Vancouver, where the average price for a single-family detached home is $1.9 million, would require an annual income of about $300,000 and a minimum down payment of at least $383,000.
(Qualification Disclaimer Detail: at the time this article was published, the posted 5-year fixed rate was 5.19%, therefore all the scenarios above were calculated based on a stress test of 7.19%. Inquire directly with Marko Gelo to calculate your qualification details based on today’s market rates. Be aware that interest rates fluctuate daily and have a direct impact on your mortgage qualification amount.)
Comparing Vancouver to Calgary (or any other city in Canada, for that matter) is not a fair comparison, but when it comes to real estate affordability…
There are very few places on planet Earth that compare to Vancouver, and Calgary by no means is Vancouver’s sister city. But it’s no pushover either. What other city can boast that they host the greatest outdoor show on earth?! If you haven’t already heard, Calgary becomes Canada’s party zone during the first half of July every year as it kicks it up a notch to host the Calgary Stampede. For the entire 9-day event, you can attend corporate-sponsored breakfasts, lunches, and hundreds of private functions daily. In Calgary, there’s Christmas break, spring break, summer break… and Stampede break.
Other noteworthy points about Calgary:
- Declared the youngest workforce in Canada, with a naturally vibrant and energetic population.
- The most sun-filled days of any city in Canada.
- No oceanic views, but plenty of world-class riverways in both urban and rural settings.
- Prairie-esque landscape to the east and rugged mountain terrain to the west.
- Surrounded by world-class outdoor terrain for golf, hiking, mountain biking/climbing, fishing, hunting, lake ice-skating, skiing, Nordic activities, snowmobiling, outdoor hockey rinks, etc.
- Calgary to Kananaskis Country-Canmore-Banff is just a 60-90 minute drive west.
- An increasingly diverse economy with the largest head office representation in Canada.
Moving from Vancouver to Calgary is undoubtedly a monumental undertaking, as it involves relocating from one province to another. Such a move may not be feasible for many individuals due to various factors, such as personal circumstances, financial constraints, or strong ties to their current location. However, for those who are open to the idea and can navigate the challenges, it could potentially be one of the best decisions they ever make. Calgary offers distinct advantages, including a more affordable cost of living, a strong job market, and a vibrant community. The opportunity to experience a different lifestyle, embrace new opportunities, and potentially enhance one’s career prospects makes the prospect of moving from Vancouver to Calgary enticing for some individuals.
Remember, the decision to relocate is significant, and it’s crucial to consider all aspects, including personal and professional factors, before making a final decision.
Wondering if a move to Calgary is possible for you? Considering relocating to Calgary? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko.
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Contact Marko, he’s a Mortgage Broker!
604-800-9593 cell/text/WhatsApp | Vancouver (Click Here to schedule a call with Marko!)
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Email: gelo.m@mortgagecentre.com
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