Scores of young adults are moving from Ontario to Alberta in search of affordable housing, but that’s unlikely to take the heat out of Ontario’s rental market.
Heading west
Statistics Canada reports that Ontario suffered a net loss of residents to other provinces for the 11th consecutive quarter in Q3 2022 – amounting to a net outflow of 11,600 people. At the same time, Alberta had a net inflow of 19,300 new residents.
These interprovincial migrants are leaving Ontario in large part due to its overheated housing market and high cost of living – the average price of a one-bedroom rental in Ontario is $2,156, while a comparable unit in Alberta costs not much more than half that at $1,283.
Similarly, many prospective homebuyers can’t afford the average $1.4 million single-family home in Toronto – especially when they still have to spend time and effort on taking Canada’s longest commute in from the suburbs. They believe it’s more worth their energy to move across the country to Calgary or Edmonton, where the average cost of a detached home is $700,000 and $490,000 respectively.
Trevor Tombe, Professor of Economics at the University of Calgary, notes that twice as many people in their 20s than in their 30s and 40s are relocating to Alberta for the province’s affordability, job opportunities, and suitable conditions to start a family.
What does this mean for Ontario’s rental market?
It’s supply and demand: if demand for housing in Ontario wanes, it will level out with inventory and housing prices will likely decrease as a result. But that’s a big ‘if’. Ontario is still the most populated province in Canada, and home to many of its largest industries and employers. Even if moving from Ontario to Alberta is the current trend, Ontario is still an attractive destination for newcomers, including non-permanent residents (NPRs).
Ontario welcomed over 106,000 NPRs in the third quarter of 2022 alone, which will top up the pool of potential tenants. And over the same quarter, the total population of Ontario rose by 150,000, more than any other Canadian province.
For these reasons, it seems like Ontario property managers needn't worry about a market contraction just yet.
