Rural Alberta is an attractive opportunity for those looking to escape housing markets in other provinces.
The rising cost of living across the country has increased the appeal of real estate markets in rural areas, according to brokers in central and northern Alberta. Many brokers are seeing an increase in out-of-province buyers looking for affordable living conditions.
Four real estate brokers talk about the real estate trends they are seeing in their markets.
Shandrie Lewis, owner and broker of Re/Max Professionals in St. Albert, said she is seeing more out-of-province buyers purchasing property in the St. Albert region.
“Which is not surprising and that has to do, I think, a lot with affordability in the region,” she said.
Lewis said it is because the Bank of Canada has raised interest rates many times in an attempt to cool the market, and that has particularly affected the Toronto and Vancouver areas.
“For a lot of buyers now, it’s unaffordable to purchase in those marketplaces. Now they’re looking to move and relocate to a province, an area, that is going to be more affordable for them. And that’s our area,” she said.
What these buyers are primarily looking for is places they can afford, said Lewis.
Lewis said one of her agents was referring so many clients from Ontario to Alberta they decided to get a licence for Alberta.
“He called me, and he said ‘I’m referring so many clients out to Alberta, I’d like to just be licensed there so that I can help them as well, because a million dollars in Toronto right now is buying you a two-bedroom condo, whereas a million dollars is buying you a walkout bungalow on a lake in St. Albert,’” she said.
Lewis said she is also seeing a lot of investors in rental properties and people from Calgary.
“Calgary investors, Calgary buyers are just seeing that it’s still even a little bit more affordable here,” she said.
The demand for rural properties isn’t going away, either.
In the areas surrounding St. Albert, Lewis said there will always be a demand for that type of property as the city gets bigger.
“There’s never an oversupply of inventory in that type of market … We’ve had some multimillion-dollar properties sale within our office over the summer. That’s always going to be desirable. There’s only so much land,” she said.
Housing inventory in St. Albert is quite low, according to Lewis, but the market is balanced.
“Anything from the $300,000 to $500,000 is still going quite quickly…It is a very good market; it is actually back into its normal balance. I wouldn’t say it’s a real seller’s market or a buyer’s market at the time,” she said.
There is some uncertainty, however.
“We still don’t know if interest rates are going to go up. Inflation seems to not be totally where the government wants it yet,” said Lewis.
Lewis said in St. Albert they have seen a lot of people downsizing because they can’t afford their monthly payments. There have also been a lot of divorces.
“We will probably see more of that when mortgages come up for renewal in the next year or two and there are higher interest rates … I do anticipate a lot of people moving downward, but then that opens the door for a lot of investors and other-province buyers as well,” Lewis said.
Tyler Poirier, owner and broker of Century 21 Poirier Real Estate, said they have had an active real estate market in St. Paul in specific price ranges.
“Right now, it seems to be in St. Paul here kind of at $200,000 to $250,000 price range. It seems to be like our main interest (for) prospective buyers, I think with the interest rates being higher. That’s the spot where it’s just a little bit more affordable and people maybe would have got a pre-approved from the bank,” he said.
Poirier said the housing supply has been quite balanced in St. Paul in the active price range.
“During COVID we had a lot of sales between $300,000 and $500,000. The supply at that price point is a little bit more limited,” he said.
Other trends include a slowdown in recreational property sales and an influx of people from B.C and Ontario.
Poirier said he has still seen demand for acreages.
“I believe that’s because the oil and gas sector is doing better in the area and there’s less unemployment.”
“People still like to have space and that piece of land with the house that they can feel like it’s theirs, and they’re not maybe controlled by government or policies or whatever it might be here,” he said.
There hasn’t yet been a rush of people selling their homes because of being unable to afford their mortgages in the St. Paul area, but Poirier thinks this will happen as renewals start to come in. However, he doesn’t believe interest rates will affect the market in his area as much as they do markets in the larger centres.
“St. Paul, Bonnyville, and Cold Lake where our average sale price is more reasonable … the impact of interest rates is lesser because our mortgages are generally smaller here,” he said.
However, he has spoken with people who are delaying the decision to buy a home to save money or wait until interest rates are more reasonable.
“Whether that’s going to happen or not in the short term, that’s in the Bank of Canada’s control,” he said.
Kelly Baker, an ACP broker/realtor who serves the Cold Lake region, said he is seeing is a lot of first-time home buyers who are afraid interest rates are going to go higher and are pushing themselves into the market before it gets worse.
Baker said he believes interest rates have hurt his market a little bit more, because around 30 per cent of the population is military, and they make a set wage.
“With higher interest rates, unless it’s a couple with dual income, it makes it more of a challenge,” he said.
Housing prices in the Cold Lake area have dropped down from the $400,000 to $500,000 range to around the $250,000 to $350,000 range, said Baker.
Housing supply in the area is balanced, but fewer homes are being sold this year than there were last year.
Baker said although some foreclosures because of high interest rates are happening now, he anticipates he will see more in the spring along with posting season.
He also said he anticipates a change in the market once the Cold Lake carbon capture project breaks soil and people come to the area for work, looking for places to rent.
“(Construction) projects are going to be a huge boost to the economy here and that’s going to help quite a bit. But as long as the interest rates stay higher, and the wages don’t keep track with that, it’s going to make it tougher for the middle market, for first-time homebuyers,” he said.
Pamela Ergang, broker and owner of 3% Realty Progress in Athabasca said the trend she is seeing is out-of-province buyers from Ontario and B.C. who have a specific price point they are looking for.
“We’re seeing a lot more out-of-province buyers than ever before. It’s starting to become more common to do video tours for clients that are out of province and them purchasing a home based on those video tours,” she said.
Ergang said she also sees a lot of people coming out of the surrounding cities who are looking to be more self-sufficient.
“I’m starting to see an increase in people wanting to just be out of the city to the country and be able to provide for themselves a little bit more, and seeing the off-grid projects coming up a lot more … it’ll be really interesting to see, as we get further down, when these properties are now going to resell, how that’s going to affect the market,” she said.
Interest rates initially increased activity in the Athabasca housing market, but have now affected what buyers can afford.
“A lot of our buyers that were originally looking around that $400,000 range or are now starting to look closer to that $300,000 to $350,000 range. They’re having to settle for less and some of these homes … are starting to see the prices come down a little bit,” she said.
Ergang said inventory is low in the area and not many people want to build homes; they are preferring to buy something and renovate.
As for people having to sell based on interest rates, Ergang said she hasn’t come across that much, yet, but when renewals come up and if the trends continue along with high utility expenses and food expenses, that might change.
“There are probably going to be a lot of people that will find themselves in a position where they can’t afford their home anymore,” she said.
By Jessica Nelson, Local Journalism Initiative Reporter
Original Published on Oct 04, 2023 at 16:53