Calgary's strong economy is expected to boost real estate market.
download (99).jpeg
A growing population coupled with strong economic growth is set to drive growth in several sectors, including commercial real estate, redevelopment and new construction. The conversion of office space to apartments is helping to reinvent downtown Calgary.
X marks the spot. When it comes to Canada's commercial real estate hotspot in 2025, Calgary is the place to be, and that's a good thing for its residential real estate market, too.
It's all because of its strong economy, says Fred Cassano, partner and national real estate leader at PwC Canada. "The Canadian real estate market has been growing for several years for a number of reasons, and there are even more reasons to be optimistic about the year ahead," says Cassano, one of the authors of PwC's Canadian Real Estate Trends report.
Released in late 2024, the report predicts that the city will be a major commercial real estate market by 2025, highlighting the city's strong economic growth in recent years, which is expected to continue this year. .
A strong economy attracts migration, which provides a tailwind for multifamily and residential real estate development.
"The economy is more diversified and, while still driven by the energy sector, other elements, such as technology, are also developing," he says. Another reason the city should have a good year, according to Cassano, is its relative affordability.
"We can't ignore the housing opportunities," he adds. "The median purchase and rental prices are certainly cheaper than Vancouver and Toronto."
The report cites Calgary as a market to watch for overall commercial real estate development and ranks third among markets to watch for residential construction.
It cites data from the Canada Mortgage and Housing Corporation, which shows that the final 2024 housing starts numbers are expected to show near-record numbers and 2025 is expected to maintain that pace. Article Content
Advertisement 2
Story Continues Below
The resale market should be so strong, says real estate agent Richard Fleming, broker/owner of Re/Max Real Estate Mountain View.
"A strong economy drives real estate because when people are making money, they want to buy real estate."
Article Content
Article Content
It's a virtuous cycle, he adds. Government revenue is up through a broader tax base. That leads to more spending to sustain growth, from roads to schools, which leads to more economic activity and jobs, Fleming says.
Article Content
Article Content
In addition, the expected increase in multifamily development will help relieve the pressure many first-time buyers and renters are feeling amid strong demand for resale homes and low vacancy rates, he added. The report said rents are expected to rise this year, but at a slower pace than in 2024, when the increase was more than 9%. However, the monthly cost for renters, about $1,859 on average, is much lower than in larger cities, PwC added. In Vancouver, for example, the average rent was almost $2,400 per month in 2024.
Advertisement 2
Advertisement
Article content
Article content
Calgary is also seeing success in reinventing its downtown. Its office market has faced high vacancy rates, more than 30%, in part due to the oil price crash of the mid-2010s. The pandemic and the growing trend toward remote work pose additional challenges for Calgary.
Cassano points to successful, game-changing initiatives, including the City of Calgary's program that offers developers up to $75 per square foot to convert office space into housing. Already, 11 conversion projects are underway, with the first 112-unit rental project completed last spring, the report said.
"Its rapid population growth is also a major economic driver," he said, noting that the report found that about 60,000 people move to Calgary from elsewhere each year, and nearly 27,000 come from other provinces.
"All of this suggests the need to build a lot more housing to accommodate that growth this year.
[attachment deleted by admin]