Housing prices, high interest rates and tax policies are driving interprovincial migration away from provinces like Ontario and BC and toward Alberta, a new report finds.
Re/Max Canada’s 2024 tax report released Tuesday looked at increases in tax rates, home values and mortgage rates in key Canadian markets in six Canadian provinces, including Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax.
The report found that while some Canadians moved within their provinces in search of lower housing prices, nearly 60,000 moved to Alberta, Nova Scotia, New Brunswick and Prince Edward Island, with Alberta accounting for the majority of interprovincial migration .
A mid-2023 survey conducted by Leger on behalf of Re/Max found that more than one in four Canadians (28 per cent) agreed that the land transfer tax had influenced their decision to participate in the housing market.
The report notes that Alberta, where there is no land transfer tax, has become a magnet for out-of-province home buyers.
“The combination of lower taxes, affordable housing and greater job opportunities (in Calgary) is expected to continue to attract out-of-province buyers, many of whom were priced out of their home provinces due to rapidly rising home values and taxes. ,” the report says.
The report says 40 percent of Gen Z and 35 percent of Millennials agree that the Land Transfer Tax has affected their pursuit of home ownership, compared to 26 percent of Gen Xers and 21 percent of Baby Boomers.
“Given today’s housing market reality, it’s no surprise that buyers are willing to travel across the country to acquire home ownership,” said Re/Max Canada President Christopher Alexander.
“In addition to affordable housing values and extensive employment opportunities, Alberta is well known for its tax position, with no provincial sales tax and zero land transfer tax for residential properties.”
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Data from the Canadian Real Estate Association last year showed the number of people moving to Alberta increased by more than 44 per cent in the first quarter of 2023, while the province experienced its biggest wave of interprovincial migration since 2014 in 2022.
Alexander said cash-rich buyers from Ontario and BC are looking to sell their properties in markets like Toronto or Vancouver and invest in Alberta or major centers in Atlantic Canada, or are looking at those markets to get on the real estate ladder.
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“For first-time buyers, this is an opportunity to enter the market at an affordable price and gain equity, as opposed to paying off someone else’s mortgage by renting,” he said.
The report shows a continuation of a pattern that has intensified since the start of the COVID-19 pandemic, an exodus of people from other provinces moving from their home provinces to Alberta.
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According to Statistics Canada Quarterly Demographic Estimates, Interactive Map of Provinces and Territories, Alberta welcomed more interprovincial migration than any other province, with 45,194 people in the first three quarters of 2023.
This is up from 22,278 in the same period in 2022.
In 2023, Alberta recorded migration inflows from Ontario (6,262), followed by BC (5,269), Saskatchewan (1,579) and Manitoba (1,316).
In Greater Vancouver, which has the highest average home price and land transfer tax among the six major markets, the biggest hurdle for homebuyers is high interest rates. However, it was the high cost of living in the province that drove people away from BC, the report found.
While the previous trend was for Vancouver residents to move to the Okanagan due to lower housing values, high levels of migration have accelerated housing prices in cities such as Kelowna, Kamloops and Penticton.
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Winnipeg, which is among the more affordable housing markets in the country with median home prices around $400,000, has seen a lot of buying activity at lower prices, where inventory is generally scarce.
But buyers looking to move up in the housing market can consider transfer tax.
The report says, “At the higher end of the range, from $750,000 to $1 million, buyers may choose to take a break and opt to renovate instead.”
The report states that the Toronto market has seen a wave of purchases of condos at luxury price points in the last quarter of 2024 due to the city’s proposed changes to the land transfer tax. However, the market has generally slowed down in the GTA.
While Toronto has a discount for first-time home buyers purchasing a home up to $400,000, Toronto’s market supply does not help first-time buyers.
“There are currently nearly 250 ‘properties’ for sale in the $400,000 range, the vast majority of which are parking lots, lockers and vacant lots,” the report says.
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