Interprovincial migration to Alberta – what is causing the surge?

A Look at the Surge in Migration and Homebuying Trends

In recent times, Alberta has emerged as a beacon for Canadians seeking affordable housing options and a favourable tax environment. The province witnessed a remarkable surge in interprovincial migration, with double the number of people relocating in 2023 compared to the previous year, according to StatCan.

The allure of Alberta’s more affordable housing market and advantageous tax policies has drawn significant attention, particularly from provinces like Ontario and British Columbia. A recent Tax report by RE/MAX Canada delved into this phenomenon, examining key markets across six Canadian provinces.

The report highlighted the impact of tax rate hikes, soaring housing values, and mortgage rates in driving residents away from the country’s most expensive markets. This post-pandemic exodus has notably contributed to increased migration to Alberta and Atlantic Canada.

Christopher Alexander, President of RE/MAX Canada, noted that the current housing market dynamics have propelled home buyers to explore opportunities across the country. For many first-time buyers, Alberta presents an attractive option to enter the market at an affordable price point and build equity, as opposed to renting.

The statistics from Statistics Canada’s Quarterly Demographic Estimates affirm this trend, showcasing a doubling of interprovincial migration to Alberta in 2023. The report attributes this surge to Alberta’s lack of provincial sales tax and zero land transfer tax on residential real estate.

In contrast, other provinces impose significant costs on homebuyers through property transfer taxes and land transfer taxes. For instance, British Columbia levies a Property Transfer Tax of up to 2% on properties over $200,000, while Ontario charges a Land Transfer Tax of up to 2.5% for properties exceeding $2 million.

Similarly, Quebec and Nova Scotia also impose taxes on property transactions, adding to the financial burden for homebuyers. In contrast, Alberta’s registration fee of around $300 is a stark difference, coupled with the absence of provincial sales taxes.

Alexander emphasized Alberta’s reputation for its favorable tax stance, attracting cash-rich buyers from provinces like Ontario and British Columbia. The proceeds from property sales in cities such as Toronto or Vancouver stretch further in Alberta or Atlantic Canada, major centers with lower tax burdens.

The influx of new residents into Alberta primarily originates from Ontario, followed by British Columbia, Saskatchewan, and Manitoba. Atlantic Canada has also witnessed a notable increase in new residents, although the numbers have reduced compared to previous years.

Despite the overall trend of migration towards Alberta, certain regions like the Okanagan in British Columbia have experienced outflows due to escalating housing prices. Conversely, cities like Calgary have seen a surge in homebuying activity, with buyers from Ontario and British Columbia capitalizing on properties priced attractively below $400,000.

The report highlights the preferences of entry-level buyers, who dominate a significant portion of the market, targeting condominium apartments and single starter townhomes within specific price ranges.

In contrast, Toronto’s housing market presents a different landscape, with a limited number of properties listed below $400,000, primarily comprising parking spaces, lockers, and vacant land.

In summary, Alberta’s affordability, coupled with its advantageous tax policies, continues to make it an appealing destination for Canadians seeking homeownership opportunities, driving a notable surge in migration and homebuying activity.

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