In a recent report, we showed that differences in housing affordability were playing a major role in driving population movements within Canada, including record interprovincial migration into Alberta.

If Canadians are chasing more affordable housing, then you’d expect sales and prices to rise more in the less expensive markets.

New data from the Canadian Real Estate Association (CREA) show that the composite benchmark national resale home price fell slightly in August, and was down 4.2% from the same time last year.* But that overall decline masks a great deal of variation across housing markets in Canada.

Prices in some of the most expensive markets—notably Toronto and Vancouver—are down on a year-over-year (y/y) basis. Meanwhile, some lower-cost markets have witnessed significant price gains (see chart).

Edmonton and Calgary benchmark prices continued to rise in August over the same time last year, hitting $396.4K and $581.2K, respectively. Yet prices in both markets remain well below the national benchmark price of $717.4K.

Closer to home, an inside-Alberta version of chasing affordability appears to be taking shape.

Consider the two largest markets in Alberta.** Calgary prices took off over the last three years, even as interest rates crept higher, while Edmonton lagged. But Edmonton home prices have picked up, rising at a faster year-over-year pace in August than Calgary for the first time since February 2021.

The difference between Calgary and Edmonton benchmark home prices peaked at $190K in May, closing slightly to $186K last month.

A similar pattern holds for sales. Edmonton resale home sales (+22% y/y) have accelerated, while Calgary has pulled back (-14% y/y).

We don’t have updated population numbers, but we know that Calgary led the province in population growth in 2023. The latest data on sales and hints from the Labour Force Survey (which attempts to estimate the 15+ population each month) suggests that Edmonton may pull ahead in population growth this year.

With home price differentials still wide, we expect that chasing affordability forces will continue to drive population movements and housing activity in Canada. Though inflation has cooled, affordability remains a concern after four years of rapid price increases, higher interest rates, and a softening labour market.

*The data have been adjusted for seasonal variation.

** Within Alberta, MLS benchmark home prices are only available for Calgary and Edmonton.  The benchmark price accounts for differences in features between homes to determine the “typical” home.

Answer to the previous trivia question: “Lord of the Flies” is the title of the Pulitzer-winning book by William Golding that was published on September 17, 1954.

Today’s trivia question: Which Alberta city has the tallest building outside of Toronto?