Alberta’s Real Estate Outlook for 2025
Calgary and Alberta Real Estate and Rental Market Update
January 1, 2025 - Written by Jamie Palmer, President & Broker of Power Properties
A Year of Unknowns: What Lies Ahead?
Normally, I would recap the previous year and provide predictions for the upcoming year… Many of you might be saying “But Jamie, how can you possibly make predictions, there are so many unknowns right now”. Will there be a Canadian Election before October 2025, will the U.S.A. impose 25% tariffs on Canadian imports, will Canada retaliate with tariffs on Canadian exports to the U.S.A., will wars in Ukraine and the Middle East expand, contract, or end? There is so much uncertainty right now it’s hard to know what to do… or is it?
The Resilience of Real Estate
One of the great things about real estate is that shelter is essential (especially if you live in Canada), right up there with food, water, and air. This is what makes it a remarkably resilient investment, it has its ups and downs (particularly Alberta real estate), but historically, over the long term, the value of real estate has increased. As the saying goes “time in the market, not timing the market”.
Calgary’s Market in 2024: Strong Growth Across the Board
Calgary’s average price for all housing types increased 11.9% year-over-year and while this ranged from 4.9% for detached houses all the way to 17.18% for apartment-style condos, even if we use 4.9% to calculate your return on investment (ROI) this past year, it’s going to be huge.
If you would like to calculate the annual return on investment of your rental property click here. If you would like to calculate the annual return on investment since you purchased your rental property click here.
*These calculators do not factor in cash flow, if you would like a more detailed analysis, please reach out to your Property Manager and Realtor® and they can provide a more comprehensive calculation.
Why Alberta’s Real Estate Market Remains Strong
As far as what the coming year will look like I am still bullish on Alberta for several reasons:
Alberta still has a fundamental shortage of housing.
Alberta is projected to need an additional 130,000 housing units by 2030 in order to help restore affordability, however, there is expected to be a shortfall of 16,000 housing units per year for the next 8 years…. Alberta’s population increased by 4.4% from April 2023 to April 2024, and saw a net gain of 44,000 people coming from other provinces. Both those numbers are higher than any other province in Canada. So while there will be periods of supply surges along the way as various purpose-built rental projects are completed, overall demand is expected to outpace supply, leading to lower vacancy rates and higher rents.
A new business and investment (read oil and gas) friendly federal government is all but a certainty.
The Canadian Conservative Party is almost assured of winning the next election with a large majority, which will likely happen in the Spring. Their pledge to cancel the carbon tax, repeal various anti-oil and gas legislation, and slash government spending will likely result in increased private capital investment (Canada has experienced severe capital flight since 2015), and should reduce the cost of food, heating, and housing. This should free up additional money in household budgets to pay higher rents (a current challenge as renters are currently “maxed out”).
Tariffs on Canadian oil and gas would be crushing to the USA.
As I’m sure you are aware Donald Trump has threatened Canada with 25% tariffs on all Canadian imports, and while I have no doubt he intends to do so, once the reality of a 25% tariff on Canadian oil and gas hits the United States, there may be some room for “carve-outs”. Currently, Canada accounts for 60% of all crude oil imports in the United States, to assume that they can source this volume of oil from other markets is not based in reality. The shock to the American economy of a 25% increase in the cost of fuel would devastate their economy. This would impact commuting, travel, agriculture, heating, plastics, and housing construction to name a few sectors. Additionally, the Alberta government has resisted calls for targeted retaliatory tariffs instead focusing on increasing border security, working to combat the illicit drug trade, and rectifying other Trump grievances, this may again help with a carve-out for Alberta oil and gas.
In addition to the above, Alberta currently has the highest GDP per capita in Canada; the Alberta economy is expected to lead the country in GDP growth with several major projects being proposed, including a 70-billion dollar AI data center, new logistics distribution centers, and investment in the energy sector.
Looking Ahead
So while there are numerous uncertainties in the coming year, the underlying economic fundamentals of Alberta’s economy are still very strong and should lead to continued growth in Alberta’s real estate market.
Written by Jamie Palmer, President & Broker of Power Properties
Jamie Palmer is the President and Broker of Power Properties. He holds a Certified Property Manager (CPM®) designation, the highest designation in Property Management in North America. He earned an Honors degree from the University of Toronto, and he has over two decades of experience in property management.
About Power Properties
Founded in 1980, Power Properties has been providing hassle-free property management services to property owners, property investors and non-residents with homes in Calgary, Lethbridge and Medicine Hat for over four decades. Our full-service property management includes everything from move in to move out, so you don’t have to worry about the day-to-day operations of your rental property. With a team of licensed professionals, years of experience, and award-winning service, you can rest assured that your property is in good hands.
