Almost daily clients reach out to ask me if I think Calgary is a good place to invest in real estate and every day I share my experience investing in Calgary.....which is NOT a good one.
So I thought it would be a good idea to share my experience investing in a Calgary condo and why I believe the market fundamentals in Calgary make investing in Calgary VERY risky.
First of all, I love Calgary and visit the city several times a year when I am out west skiing. I am always blown away when I fly into Calgary by what appears to be infinite land in every direction surrounding the city. Other than possibly due to building capacity, Calgary will never have a shortage of land.....that is for sure!
Now let's compare that to the GTHA, which due to Lake Ontario and the Green Belt has created a shortage of available land to develop therefore creating an immediate supply issue, which is pushing the cost of land higher and therefore housing higher.
The median price for condos in Calgary in 2007 was just shy of $300,000 as per the Calgary Real Estate Board. As of Q3-2023, the median price is $282,500 which is roughly a -5.83% decline in pricing.
That's right..... condo prices have actually gone down in value over the past 15 years!!
LET'S COMPARE THE NUMBER TO THE GTHA
Many of you know that I am personally investing heavily in Hamilton real estate. Hamilton has the market fundamentals I saw in Toronto when I started successfully investing in the Toronto condo market in the early 2000s.
The median price for condos in the GTHA in 2007 was just shy of $200,000 as per the Hamilton Burlington real estate board. As of Q3-2023, the median price is $530,000 or roughly an increase of 165%!!!
Book a meeting with me or my team to discuss Hamilton opportunities
Calgary's economy is closely linked to oil and gas. This connection makes the city's real estate market uniquely vulnerable to the volatile nature of oil prices.
When oil prices rise, Calgary tends to experience economic growth, increased employment, and subsequently, a surge in housing demand and prices. Conversely, when oil prices plummet, we typically witness the opposite.
Remember the 2007 real estate prices above? That was when oil prices peaked and then dropped with real estate following.
LEARN FROM MY WINS.....AND MY FAILURES!!!
I purchased the condo below in Calgary in 2019 for $258,259 and I just sold it 4 years later for $230,000. That's right.....a $30,000+ loss. This is officially my worst real estate investment.
To make matters worse, I could not secure financing because the appraisal was too low and I had to pay all cash for the condo. I know of 3 other buyers who could not secure financing and walked away from their deposit because they couldn't close.
MY PURCHASE AGREEMENT IN DECEMBER 2019 VS. IN OCTOBER 2023
MY PURCHASE AGREEMENT IN OCTOBER 2023
Calgary has been gaining a lot of popularity recently due to the significantly lower pricing compared to markets like the GTA or Hamilton, however, just because something is cheap, doesn't mean it's a good investment!
When I invested in 2019 I drank the kool-aid and chased an investment in Calgary while ignoring the basic fundamentals I've highlighted above.
I am sharing my knowledge (and experience) so other investors can make a more intelligent decision when thinking about investing in Calgary.
If you would like to learn more about the Hamilton market or would simply like to chat about the best investment option for you, book a call with one of our knowledgeable agents below.