The ReTour: Alberta Real Estate Deep Dive

Welcome to the Canadian Real Estate Investor, where host Daniel Fosh and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio. Hey everybody, quick announcement before we jump in here. We are launching a brand new series. I'm just learning about this as well next just putting words in my mouth here to fit in. I'll take my heads up. We're launching a brand new series on the podcast called the Canadian RE Tour. Is it our e-tour or a retour? Come on, it's a real estate podcast. We're going to retour the Canada. I actually go. I turn it around. I just love it. Just love steroids. Not yet. The idea is simple. We're going to be going province by province and doing a deep dive into each one. So talking about the major cities, house prices, what kind of strategies are working, what's not working, and of course where the real opportunities are. If you live in that province, this will help you understand your own market better. And if you don't, it'll help you decide whether you should even be paying attention at all. Obviously, we're a national show. And Dan, you and I have had the luxury and the privilege of traveling all over the country to meet so many of you amazing listeners in person. And look, Canada is a massive country. Every market is different, nuanced and unique. We want to be more useful to you in every single one of those markets. The first stop on our cross country journey is we are starting with the beautiful prairie province of Alberta. Yes, Alberta. Dan, you and I have some pretty good times over the years in Alberta, both in Calgary and Edmonton and even Reddere. Just makes me want to go get my, one of my many cowboy hats now, my cowboy boots and just say, come on now. You will never pass up to say pass up an opportunity to say, come on now. Or anything cowboy related. So it naturally would make you want to do that. The province has a lot of other stuff to offer beyond cowboy hats and opportunities for Nick to cosplay, being a character in Yellowstone. But skiing and snowboarding, picturesque national parks and mountains, more than 600 lakes and a lot of sunshine actually. Yeah. Also, Dan, did you know that Alberta is one of only two landlock provinces? Of course, neighbor needs to sketch one being the other. Well, I guess some Manitoba touches like Hudson's Bay. The eastern part of the province is occupied by the Great Plains while the west is the Rocky Mountains. This is like tip like big old like Sattler or Cowboys stuff back in the day. I think I have to go. Don't make me say, come on now again and look. Yeah, that sounds badass. Just you saying it also. Is that where the hundredth meridian is? Is that where the Great Plains begin? Nice. Yeah. There we go. A little tragically hippyster egg for anyone listening. So look, let's get into some faxable to Alberta to set the stage. Alberta is the fourth most populous province with approximately just over 5,5 million and 30,000 by the third quarter of 2025, which is the most recent data. And Alberta's capital is Edmonton, which surprises some people because of the largest city is Calgary. More than half of Alberta's live in Edmonton and Calgary, which of course encourages a continually healthy rivalry between the two cities, kind of like an oilers and flames type of rivalry. What Alberta is much more than its major market. It has 19 official cities with major ones, including Red Deer, which we have a real estate CIA member who's crushing deals on Red Deer right now. Less bridge, AirDrie, MedicineHack Grand Prairie and St. Albert while others like Cochran or Katauks, is that right? Well, man, I hate Mr. Townsend stuff. So then Lake, we got some deals going in some of the lake on real estate CIA as well. And the lacfalls are large towns aspiring for city status plus urban service areas like the legendary Ford McMarie. Oh, yeah. And don't worry. We're coming back to Ford Mac later on in this episode. We'll see if you're while we're talking about it. Before you get excited about your script, have you seen Fubari yet? Like, what do you mean yet? Of course, I saw it. Like that. The Mac is obviously number two. It's like what? It's like a Christmas movie. A Shanto class. I did see it years and years ago. My family refused to watch with me around Christmas. It was more of a. I tried many of the Christmas. I said, "I certainly think I should have my family's here." Nobody was having it. Didn't fly. Yeah. Well, look, if you want to understand Alberta real estate, you have to start with this idea. Alberta is practical. It's a market that generally rewards fundamentals. Cash loan matters, affordability matters, employment matters, and Alberta are usually pretty realistic, but all that stuff. Today, we're doing a full Alberta deep dive. If you live here, this will feel familiar. If you don't, this should help you understand where the opportunities are and what you need to respect about the market. Because. And on that note, a lot of people haven't been respecting it in this pre-con-emoralized tough. Yeah. Yeah, that's very true. I'm a segment, I hope, but yeah, growing, definitely growing, risk and concern there. And again, on that note, welcome back to the show. Everybody, Nick Hill and Daniel Foes here, as always. And this, again, is part of our province by province series. We're going to break down real estate across Canada in a way that actually reflects how people invest. We're going to be doing a deep dive into data and stats and the course, Dan. You and I have been to most of these, are all of these provinces and we're going to do a deep dive. And stay tuned for, we're likely going to be releasing one of these episodes per month on each province and then rounding out the whole year with kind of what we've seen and really painting a broad stroke across Canada with, you know, individual, very holistic, deep dives into each one of the provinces. Holistic, all right, cool. I like that. Here you're doing some. Well, they call those, where people go away, like a retreat, holistic retreat. So we're going? If we're going to Alberta, I'm down. Not too theoretical. We're going to try and be as realistic as possible here. Yeah. And look, Alberta is a great counterweight to other major markets that we've talked a lot over in the show, specifically Ontario and BC because the incentives here in Alberta are just different, right? Alberta's got a big economic backbone. It is a production province. Energy, agriculture, logistics, manufacturing and actually surprisingly, increasingly tech and of course oil. Yeah, and that matters because production economies tend to anchor housing to employment in wages. And wages in Alberta are generally strong. Right, and the trade-off is that the production economy can be cyclical, which we're going to get to. Alberta doesn't hide from that party. There are people in Alberta that we've spoken to over the years in. We'll talk about that pretty openly. You know, here investors say things like I bought it in this year and the year actually matters, right? Exactly. And Alberta leads Canada in oil production, something that we're all probably aware of, significant reserves and both strong agricultural and forestry sectors. It's also a major food producer. Wow. Energy is central. Other key contributors, including finance, real estate, retail, business services, healthcare and education showing a shift from its historical single focus economy. Notes the business council of Alberta and the government of Alberta. And on that note, you know, production economy, Alberta is able to post Canada's highest GDP per person with the most recent data from 2024 at approximately $96,544 Canadian dollars placing it in first place in Canada. And then just so we can kind of outline how much of a difference we're seeing in Alberta versus the other provinces. I'm going to quickly rifle through the GDP per person of other province. So again, let's use Alberta as the benchmark here. $96,544. Saskatchewan is about $75 to $80. Newfoundland and Labrador, $70 to $75 on terriot, about $70,000. So, you know, $20 over $26,000 less. BC, again, notoriously expensive place to live, $65 to $70,000 GDP per person, Quebec, $55 to $60, Manitoba, $55. Nova Scotia, $50 to $55 New Brunswick, $50 to $55,000 in Prince Edward Island, $45 to $55,000 GDP per person. So that is a more or double difference, literally crazy, right? Yeah, it's more than double some of these. So we know that there's a bit of an Alberta acceptorism on the economic side. What about on the real estate side? Let's take a bit of a look at the real estate fundamentals there. Yeah, for sure. From a real estate perspective, Alberta is still one of the most affordable provinces relative to incomes. Which supports both rental demand and investing for rising creation perspective on the MLI select points, and while is obviously a strong demand for ownership. Yeah, I mean, cash will exist. And so do half decent cap rates in most markets. Not on every deal, of course, not magical, but it is attainable. And this is a market where you can still find a good deal in Alberta and make it better. Damn, we have many friends and clients doing a ton of deals out there right now. It's not just, you know, we've said for years, good deals are made not found, but in Alberta, you can do both. You can find a good deal and still make it better. Vacancy risk in Alberta moves with employment. So you need to understand the local economy and what's happening in Alberta, not just provincial averages. And there's a bit of a macro angle as well. Now because affordability is better there, people tend to underwrite deals a little bit more conservatively. And Nick, you've been working with a bunch of multifamily and commercial deals in Alberta. What, like, why is the affordability thing in a higher GDP per capita actually so important in real estate deal there? Yeah, it's a good question. And I'll speak to you. just one aspect specifically, which is of course C.M.H.C. and using the MLS-LEC program for purchasing or let's go specifically construction financing or financing for again a purchase or even a takeout. What you do is use the meeting income for instance in Edmonton, which is $665. If you want to achieve MLI points through the affordability metric, which we see a lot of people using that metric in Calgary and Edmonton, less in places like Red Dears on the mid-tier cities, 1665 for rent to be affordable is huge. That metric changes the course across the country, geographically based metric. People for instance, let's say aren't using the affordability metric to gain points in C.M.H.C. and the likes of GTA or the lower mainland in a lot of cases. If they are, it's only to get a few points. People are usually building energy efficiency where in Alberta, especially in Edmonton and Calgary, the major markets, they were seen a ton of people be able to achieve those MLI points through the affordability metric. Can you explain why Red Dears won't hit the affordability MLI? I know this, but I think it's like the cutoffs for what's considered affordable red, which is based on percentage of median income. Red Dears income is quite a bit lower than Edmonton. Yeah, that's exactly it. That's exactly what you just described leads to an affordability number. I don't have it off the top of my head, but it is. I just under wrote a deal earlier this week and it's about under $900. I want to say $868 or something like that. To commit to an affordable unit for five to ten years at that rental amount, it just doesn't make sense. It doesn't pencil out for a lot of people. We see people using the more traditional energy efficiency or just not even getting that full 100 points aiming for a 50 or 70 points in Red Dears. We're just doing CMHC standard, right? Like, I think it's for a corner world. Yeah, like the guys who we were working with in Cornwall, they just finished a 15 unit and they didn't even, because I think Cornwall is Cornwall, I think it might be the lowest city for affordability, right? It is. Yeah. So you scroll down to listen Cornwall is just in red and you're like, "I don't know. Okay. But if you just have to under-aid deals, and if you're not getting MLI in like a red year, which is not a bad idea either. Yeah. And Edmonton and Calgary are doing MLI. Anyway, obviously big wins all across the board for these markets, because in a red deer, you're going to be paying a lower price and you can often find deals at work on CMHC standard. The one that we're mentioning that we just went through for our student in the real estate CA program, it penciled that way, right? So this is why we see so many deals getting done in Alberta. The numbers work and investors are no longer pursuing speculation anymore that they're pursuing yield and development and value creation. And Alberta just seems to have less red tape around permits and zoning and just the overall ability to get a project or a deal done. Yeah. 100%. So let's switch over to and start talking about maybe some average home prices in some of these major markets. Okay. As a December 2025, the most recent data we could pull, the average home price in Alberta was approximately 512,000 dollars. Obviously regional differences between the two rival cities there, right? Calgary average home prices, they were relatively flat with just about $616,000 is the average price of December of 2025. So it's about two months ago. And homeowners needed about 40% of their income to cover that mortgage on that kind of median priced home in mid 2025. And that is of course exceeding the long term average of about 36% so up a couple points there. Edmonton, little different, remained more affordable than Calgary average price about $454,000. So about $150,000 less for that two hour drive north. And that was in December as well. But that of course is going up as well, 4.5% year over year increase. Now Dan, that's on the purchase side. Talk to me about the rental market there. Yeah. Well, if we look at rent, the provincial average, Alberta's average rent for purposeful and condo apartments was roughly 17 to 1770 in 2025, which is notably about $300 to $400 less per month in the national average. Calgary rents after years of sharp increases, red growth and Calgary slowed in 2025 with an average of 1915, which is a draw average drop of about 7.8% year over year in some sectors. And we're going to go through this another upcoming episode on the Yardi report that covers all markets across the country with average with rents there. Edmonton rents have shown more stability with average rent for a two bedroom unit in late 2024, 25, had approximately 1500 to 1522. And red growth for three bedrooms units in Alberta saw a sharp rise of 5.6% year over year. So you are seeing some attractiveness in the family size stuff there too. For sure. I mean, that makes complete sense. Three bedrooms anywhere in the country are getting more and more love and I love to see it then because that means people are maybe having more kids or getting a bit more space. And we've seen that flight to affordability in major and mid cap markets in Alberta. So that's no surprise there. Let's look at another important metric here though, which is of course vacancy tied directly to rents. Vacancy rates are on the rise. Okay, that is a Canadian story right now that is not Alberta specific story. Obviously following an extremely tight market in 2023, vacancy rates in Alberta and major cities began to rise in early mid 2025 due to a record influx of you guessed it purpose built rentals, most likely using the C.M.H.C. online select product. Calgary, the vacancy rate was expected to rise to 6% in 2025. And of course, that's a significant increase from 1.4% just two years before. And Edmonton on the Edmonton side, purposeful rental vacancies increased to 3.8% in 2025, driven by strong, strong completions, strong pre-con investors and slower yet steady household formation. In the supply side, they saw 20,000 rental units started in 2025, nearly triple the levels of a decade ago, which is obviously helping to stabilize prices and reduce the rate of increase that we saw when Alberta's population, if you remember this, I'm just population growing for a period of time at 11% year over year. Crazy. Yeah, you're right. So, okay, that's rentals, that's vacancy and that's purchase prices. Now, let's look at cap rates. You know, commercial cap rates in Alberta generally range pretty decent numbers right between 5% and 8% with Edmonton commonly seen, a little bit higher edging that 7% to 9% for, you know, different asset classes, Calgary, suburban retail. We see sitting around 5 to 6.5. Rates depend on, of course, multiple different things, right? Here, type of asset, the exact location, which can change in within the city, of course, the risk and the asset type in Dushy, a multi-family, etc., etc., they're all showing different cap rates, but they're still generally pretty strong there. And I say the same for Alberta's mid-sized markets as well. Secondary market properties are, again, reaching that, you know, 6 to 8, even 8 plus in some cases cap rates. And let's not forget that Alberta is often considered the most landlord-friendly market. So we've got all these forces where you always hear about people saying, right, control is bad for the market and supply constriction zoning is bad for the market. So Alberta has no, neither of those things in low-bulled, it's an affordable market. Allowing market rate increases because they have no rent control, you know, you can increase rents with proper notice. And there's relatively clear eviction processes. No one-year waiting lists and all that stuff for any serious breaches. We've done full episodes on this comparing which provinces are more or less landlord versus tenant-friendly and kind of like what the protocol looks like for all the different provinces. So go check those out. I won't get too deep into it for this episode. Okay, so we've done kind of a high-level look at Alberta and some of its major markets. But let's do a bit more of a provincial tour and hit some of the major cities. We'll start with Calgary City of about 1.6 million people nestled along the Bo River with of course the Rocky Mountains in the distance. Calgary kind of feels like and has felt like this for a while there may be the most investor aware city in Alberta, but maybe even in the country. Oh, yeah, for sure. I would agree. And I think you see that a lot with the like even just when we go to our meetups, like everybody there is like has done a deal or I don't know, like it does hit different for sure. For sure. And corporate, it's professional has pretty strong way color employment based which is not like what you think when you think about Alberta, right? You think about people getting dressed up like Nick and doing cowboy stuff. But it's not, you know, it's not what it's like, right? And Calgary is home to 102 corporate head offices based on Calgary's economic development. Yeah, look, and those head offices are good thing head offices are economic anchors for a city and for that central business district of that city, the early people and the entities that take up those, you know, 10, 20, 150,000 square foot spaces in the offices, they bring high paying jobs, they attract professionals and of course financial services. And you know, it kind of helps concentrate decision making power being a major pull factor. Yeah, in real estate terms, strong head office, present support for down to that office space, high income housing and local services. You'll see a lot of town homes, condos, inner city rental strategy here, but Calgary also has a ultra luxury market that's remained fairly steady. And of course, we've seen a bunch of multiplex and missing middle construction, but I think the market there. against supported by that solid mix of both white and blue color. 100%. As of December 2025, the Calgary Housing Market continued to show signs and balanced conditions. The market experience, 14.8% over your decline in sales. It hit that plateau. Be a little bit later than everywhere else, which we said was going to happen. Your GTA Vancouver sent tends to be the Canadian. The cool line in a lot of these other markets roll over after as a result of negative wealth effect and 1100 homes changing hands in December. That gives us that almost 15% decline. At the same time, they're inventory increased by 29% in the previous year reaching 3,800 units. The overall benchmark home price for Calgary was $550,000, representing it about just shy of a 5% decrease and 80 basis point monthly decline. Calgary does seem to be reaching that point where it's tapped out. Which have prices can grow over the cycle. It'll probably plateau maybe even down a little bit for the period of time, but it might resume its growth path sooner than some of these other markets. Just based on the fact that people got afford stuff there. Yeah. What a crazy thought. The sales to new listings ratio is about 92%. Of course, that has some seasonal factors contributing to it. The months of supply reached 3.5% maintaining the balanced conditions that we've seen in recent months. That's the story about Calgary. Let's drive north for a couple hours here and talk about Edmonton. Edmonton is different. The capital of Alberta and Canada's fifth largest city. It's a young, fast-growing, metropolis with a population that just broke a million, I believe, last year or maybe late in 2024. This is a cool fact. The city has one of the youngest populations in Canada, medium age of approximately 37 years old. Funny, I know a couple of US investors who literally only buy based on the youth in the city. That's the only metric of old magic. It does show you the most runway of the city. That's what it's going to grow into. A lot of industry, government health care, education, very stable employment and this stability shows up in the rental market and the ownership market. Totally. We know as the oil capital of Canada and a major hub for, of course, the Alberta oil sands, but it's also, again, this is a bit surprising, a top global city. A serious global city and contributed to artificial intelligence and AI and, of course, machine learning research. I wonder if that has a bit to do with the temperature up there and having the ability to have like kind of server farms and whatnot or if they're really trying to lean in and adopt AI and machine learning practices in kind of a bit more of an archaic oil sands industry, but I found that one quite interesting myself. Yeah, it makes sense. I mean, like the coal climate, cheap electricity generation, I mean, like, like, not a lot of people know this, but like they, for natural gas, like they generate so much of it that they literally like flare it, like they just burn it to get rid of like the excess. And so they can, you can use that to do like while they're flaring it, you could just run natural gas power generation. So there have been some pretty big deals. Like I remember, it's funny because I used to do these deals into Bitcoin mining space, like way back 2016, 17 traveling around the country looking for power sources. Like, you know, I had clients buying hydroelectric dams and you know, partnering with not gas companies to capture some of their slared gas for electricity for and server farms is the exact same thing. So that that philosophy is translating over to to your kind of like AI machine learning server farm environment. So Edmonton is also favorited for cash flow focused investors as well for sure, right? Less volatility and generally lower entry prices, which which likely means more upside if you can, you know, make a deal a bit better. Yeah, but you know, and that sort of comes in a cost. The reason that there that prices don't grow as fast is because there are sort of prices are as high as because they haven't grown, you know, as fast as some other markets historically. Yeah, from an appreciation perspective for sure. Okay. So let's look at some stats here, a bit of a market report for Edmonton, the average home price in Edmonton was again, just about 455,000. That is up 1.8% from the month before. So kind of a bit of movement there in Q4 of last year, but represents almost a four and a half increase year over year from December and Q4 of 2024. Rich market prices grew 2.8% annually, really kind of unchanged in Q4 of last year. The average price of a detached home increased to and a half percent, but remained almost 5% higher year over year. And semi detached homes, the average price increased just about a half a percentage point remaining at about three and a half percent higher year over year. Now townhouse average prices increased 2.2, 2.6% month over months to just under 300,000. It's up about 1.5% year over year. Abtardments decreased almost 6% on a year over year, or 5.1% down on a year over year basis to just below 200,000. And among Canada's six largest population centers, Edmonton remains the most affordable, large city in Canada. Yeah, no surprise there, Dan. I mean, you and I have spent Edmonton many times over the last couple of years and you can see the movement that you can see the affordability. There's a ton of construction going on, bunch of single family homes being built, bunch of purpose built rentals being built. But the story doesn't end there because there are many other places in Edmonton. It's a province that has many mid-sized cities on the come-up. So you've got places like Red Deer, for instance, Dan, which you know, that holds a special place in your heart, located essentially between Edmonton and Calgary. It serves as a major hub with a population of about a hundred and ten thousand. And these are like true mid-sized markets. Toronto and this huge urban agglomeration with a bunch of small cities around there. These are localized economies that are hours away from one another. For sure. And these, that's important because these work really, really well if you can understand the fundamentals and things like understanding the employer base there. But they're also high risk, high reward, right? They're way less forgiving if you don't understand them. And this is where being a local expert or having an exceptionally qualified local power team is so important if you're going to invest in some of these kind of smaller, more niche markets. Yeah, I couldn't agree more. Okay, so let's talk about some of those other niche markets that you mentioned. Okay, so Red Deer, let's talk about Red Deer's housing market in Q4 last year. We saw home prices sales down 13 percent year-over-year. The average home price was down to literally 399,000, just under 400,000. That's actually an increase of 3 percent compared to the Q4 of 2024. I guess we also have a last bridge. Tier was a population of about 113,000 up 1.7 percent year-over-year and over 11 percent in the last five years inserting a trading area of nearly 340,000 in the surrounding area. Last bridge is on the bird as fourth largest city. And in December 2025, home sales fell the number of sales at something price. 6.3 percent year-over-year with the average price up 20 percent. 2.4 percent, 70,000. Yeah. Take it easy over there, let's bridge. Another mid-size market here, medicine hat, which has a population of about just under 70,000, which is that population has grown 5 percent in the last five years. In December of 2025, home sales fell 10 percent. Again, not the price. That's the transaction volume. The average price rose at that same point almost 4.5 percent to $326,000. I'm pretty sure medicine hats the sunniest city in Canada as well. I think some of the more investors in real estate was buying something that I mentioned that. Just like a random little fun fact. But anyway, grand prairie as well, population 70,000 up 3.1 percent annually since 2021. In December 2025, home sales rose 34.8 percent year-over-year with the average price of 360,000, which is down about 1 percent from December of year prior. We can't talk about markets and actually 4.8 is not considered a city, but we got to talk a little bit about 4.8 because Dan, I think you and I are of the generation where I think we both knew dozens of people. One of our old business partners has actually spent a few years in 4.8. When we open up this episode about the economic backbone, if we're talking about economic backbone, Fort Mac is a pretty serious part of the spine of Alberta, a real resource-driven economy and market up there that don't only supports that local market, but really supported a lot of Albertans moving there and a lot of people from the prairie and even across the country. There was a huge amount of Canadians that went and spent time in Fort Mac for quite some time. Yeah. And the big key with these is like, yeah, high risk, high return, right? There's high incomes in these markets sometimes, but there's high volatility as well. Totally. These markets can work for very specific strategies at the right time. Yeah, but as they said in our favorite movie, Thubar, the Mac is a cruel mistress, right? So they can require discipline and timing. For sure. Okay. So let's talk a bit more about Fort Mac. It's an urban service area in the regional municipality of Wood Buffalo and Alberta. So not really even considered a city that's located in Northeastern Alberta. It's in the middle of the Athabasca oil sand surrounded by the Boreal forest. And of course, it's played a very significant role over the years in the development of the national petroleum industry. Now resource-driven markets like this offer a high-reward, high-risk profile that suits tactical investors with sector-specific expertise, strong employment and above average incomes, drink, boom cycles can drive rapid rent growth and valuation growth and exceptional cash on cash returns. But these can also swing very sharply with that market commodity prices, project timelines, so you have to have the stomach for that. Yeah, I mean success here requires a really defined strategy and investment thesis. You need to underwrite for these stress scenarios that you mentioned, Dan. Like, oil prices drop and so does the price of your house and probably so does rent. You got a lock and favorable financing where you can upcycle and build contingency and cash reserves for downturns, which are almost a guarantee in these types of markets. Shoulder holding periods, value-ad plays, timed peak activity, or lease structures that capture upside-well, limiting downsides, so maybe shorter term or rents that can easily change with inflation or the market. So, the traditional pure buy and hold approach probably hasn't worked so well in a market-life format. Equally important are exit planning and tenant risk management. Diversified tenant exposure when possible in markets like this and sec clear sale or reposition triggers tied to market indicators. If you are worried about like kind of like, I don't know, if you're stopped trading, maybe those are kind of like your fail sale or whatever you call it, stop losses, right? You want to have some fail sates here to hedge against some of those risks in the market. Obviously, you see attractive, episodic returns, so like in short phases, short bursts, but only really participant investors who prioritize timing, underwriting conservative and have an actionable exit strategy when you're going to get into a market that's more volatile like these. Yeah, for sure. Now again, that's Formac. That is an isolated market in a very unique and nuanced one across the country. So, let's go back and talk broad spectrum in Alberta. What tends to work here? Well, Alberta does tend to reward the more traditional fundamental stuff like long-term holds. Yeah, you get the buy and hold rental, small multi-family townhouses and of course a lot of missing middle and multiplexes. Let's not forget either that we have seen Canada aggressively pursuing office residential conversions and Calgary is one of the few markets around Burda's one of the few markets where that's done well, particularly through the federal six hundred million dollars fund for transforming empty commercial spaces. Obviously, Calgary, the biggest pioneer within downtown incentive program aimed at converting millions of square feet successfully. Yeah, I mean, Dan, I remember the first time we were there had three, four years ago and we were walking around downtown together and we were like, there is a ton of empty office space, right? There's like colliers and JLL posters in every main floor of an office building. There must have been hundreds of thousands of vacant space back then and it's been cool to kind of watch Calgary take the lead on what is not an easy task turning an old commercial space into residential. So, you know, we've been talking about it's easy if your vacancy rate, I don't know, obviously vacancy rates like 20, 26% or whatever it is they have. Well, I guess you don't really have a choice at that point, but you know, I think a lot of this goes back to something that we've been talking about in the show for a while and kind of, I don't know if we coined this term and you know, when we had Dama on he was kind of saying the same thing where operations, right? Operational competence matters more now than ever and that is the story in Calgary and all and and the rest of the major markets in Alberta. Yeah, for sure, like good management reasonable leverage realistic rent assumptions, good models, good operations. Exactly, you know, find a good deal, make it better, do the value add stuff, but it's often more operational than regulatory in these markets. Yeah, it's less amount like moonshots and zoning gymnastics more about execution. We are in the age of the operator after all. Yeah, I mean, Alberta rewards practical strategies that focus on steady rental income, good management and not speculation, right? They didn't, I mean, a little bit of it went on there, but the team not since that went on and kind of ruined a lot of the market in the GTA and the lower mainland didn't happen as much in Alberta or at least hasn't happened as much yet. So, you know, simple buying hold for small cap property, small apartments, buildings, duplexes, triplexes, that all works well, especially in, you know, in Edmonton and smaller cities where again, homes are just more affordable jobs pay higher and it's a bit just more of a stable economy. Yeah, you can add value, but usually through better operations, you know, hiring good property managers, keep units rented, make sure your rencer kind of at the higher end of what they can be, upgrade your interiors, recover utility cost maintenance and in well downs, obviously, quick projects like renovations can work during boom times, but taking also draining a bunch of cash, you really got to be careful with planning cashers and a clear exit plan. You know, look, I mean, this is obviously an Alberta deep dive here, but this is pretty good advice for any market. You want to use reasonable debt. You want to be in a good leverage position and especially these, you know, I'd say Edmonton and some of the other markets, they're a little more oil dependent, maybe than Calgary, but you want to plan for drops in oil prices like and job, which oil price is equal to job losses and, you know, make sure that you've got maybe a diverse group of tenants, right? I mean, we talked about all the other sectors, healthcare, government, tech, AI. So focus on that and again, be that good operator. And then you look at sort of like your warehouses and commercial properties near shipping routes are also doing pretty well because Alberta produces and ships a lot of goods. And obviously, you know, this is for any market, but local, knowledge and good execution, good operators, careful tenants selection, smart maintenance budgets, understanding of local costs, they are all going to make a big difference between success and failure in these distant markets, right? Totally. Okay. So let's talk a little bit about some of the challenges and trade-offs that you're going to face in this market. I mean, I think the biggest challenge in Alberta overall, Dan would be, you know, being able to be patient. Yeah, flat periods happen. And they can last a lot longer than people expect and they can come at unexpected times. It's not necessarily bad, it just requires planning. Yeah, exactly. And another challenge, of course, is understanding how local each market is in the dynamics of those specific markets. Two neighborhoods can behave very differently. So let's go through some of the recent cycles that Alberta has seen. Okay, let's go all the way back to 2014 to 2017, where we had a bit of an oil bust, a major collapse in crude prices back then led to a long and deep recession with roughly 100,000 highway jobs disappearing. Okay. So that's, how's a rough couple of years for Alberta and just about everybody in that economy. And again, you know, upstream, downstream from real estate, obviously, of course, it was affected. Then three years of, you know, let's say a bit more of a normal market and then of course the 2020 pandemic and the oil price war, the pandemic and a simultaneous oil price war caused a 7.9, so call it 8% contraction in 2020 describes as the deepest shortest recession in the province since 1929. That was a pretty intense. Short and sweet. Then you had 2021 to 24 recovery and sort of their new normal following 2020, there's a rapid rebound occurring due to rising oil prices, but it didn't feel like a typical boom because investment, investment remained cautious and employment in the oil, I guess, sector did not return to the 2014 peaks. Then you have 25 to 26. I mean, Alberta is expected to continue up piecing the national economy in gross. Not to say that that's an amazing thing because I don't think the national economy is expected to do exceptionally well. It's easy to be like, guess less than 1% growth. Yeah. But you know, driven by their high population growth, which is the highest since 1981 and strong housing construction according to their 2025 outlook, you know, I think that there's going to be some strength there and they're they're expected to run a pretty significant deficit, but all the problems is are realistically, but 6.4 billion due to falling oil prices and rising expenses. Okay, so we talk about the slow time down real estate long term play, right? The bare minimum you should be looking, unless you're doing some kind of flip or wholesale or real quick deal like that, you should be looking at any of your assets in a minimum five year old in period, basically tie to the standard mortgage. But let's look at the five to 10 year outlook and long term speaking, Alberta does have some strong tail winds. Yeah, I think there's a lot of things. I mean, all the attention is on it right now, right? Interprement to migration is probably the biggest one that we're hearing, but everybody's going, Alberta is calling, right? Apparently. Yeah. And a lot of people have answered, and the reason they have answers because affordability matters. Yeah. Economic diversification is real, even as energy remains important. Infrastructure, housing supply and employment growth will all be key variables. Alberta's five to 10 year outlook, 25 to 35, so I say at for us today until 2035, indicates that the province will likely continue leading Canada and economic and population growth driven by resilient energy sector, high migration, people going there for that affordability, even though it faces challenges with diversification, labor market shifts, and infrastructure strain. Yeah. Key factors include continued population growth expected to exceed 2.2 million in Calgary alone by 2030. So that is a ton more people headed to Calgary, hundreds of thousands more. Of course, that is going to result in even more robust for demand for housing and kind of a slower, but progressive transition toward a broader economic diversification beyond just the classic oil and gas that Calgary, Edmonton and Alberta's known for. - And on the economic and industry outlook side, Alberta's real GDP is pretty much due to grow 2.1% in 26, 2.4% in 27, which I would paste the national average as we mentioned. Welling gas obviously remains central to this, supported by improved pipeline capacity, which we're hitting the federal government discussing now, which could increase it even more, but they also faced long-term price volatility risks. The gross is expected in technology, renewals, agriculture, and through natural resources, probably saying the primary drivers and natural resource side, and in construction, because the population growth has been ripping, we're seeing a lot of residential demand, continuing major affordable housing investments plan through 2031, population growth is just gonna keep the housing sector growing, so you can get for real estate investors, real estate professionals, developers, et cetera. - Yeah, I mean, not only do we see net migration and immigration landing a lot, but we see a ton of inter-provincial migration data. I mean, it wasn't so long ago we covered the U-Haul index on one of the episodes, and Alberta has been consistently the fastest growing province as well as its major cities in there. That has been the story for, I believe the last three years that Alberta, Edmonton, Calgary, and a lot of those mid cities that we spoke about continue to grow. - Then the job market is expected to rebalance with the unemployment rate easing to 6.9% by 2026, with shortages in some of the skilled trades, nurses, technology, and other key sectors in the next 10 years. - I mean, Alberta still is calling, right? It's got affordability, and they need skilled labor. So to wrap this up, and kind of take a grandiose look at what the economy's looking like, it should still grow at a normal pace, like it did throughout 2025. You know, TD economics is calling for a little bit of a slowdown in 2026. Still, however, Alberta is expected to do better than most other profit. It's no surprise they are growth is coming again from oil and gas construction, and guess what, just the general economy activity. People are still buying things in Alberta. The sidelines obviously aren't as fill as they are in the rest of the country. And of course, this makes up for problems in manufacturing and the wholesale businesses that sell to the US, so forth of the border. - And Alberta's oil production is near all time highs because they're strong men and enough open pipeline to space to ship it. The energy sector will keep growing in 2026, but lower oil prices means companies will drill less and spend less money. Lower oil prices are also hurting Alberta's budget. province now expects that deficit that we mentioned, which is much worse than the one and a half billion that they predicted earlier. But the price is $5 million or $5 million over budget. - Oh, you know, only government. - Just a lot of men, only governments. - Yeah, but the Western Canada Select Oil is selling for only 10 to 12 dollars last per barrel than regular oil, which is sort of a narrower spread than typical, which helps offset some of the budget damage. - Yeah, and look, I mean, obviously if something major happens with this, we will cover it, but things could get a lot better for probably Canadians overall, but specifically for Albertans. If new pipelines get built, these could add about $600,000 barrel per day of shipping capacity over the next two years. And Alberta and the federal government have also signed an agreement that sets new rules for approving new oil pipelines with at least one million barrels per day of capacity. This is overall very good news for Canada, okay? But we won't count on any of this until, you know, a company actually commits to building it. And, you know, those conditions are met because we've been hearing about these pipelines for far too long without anything really happening. - And, you know, through 2025, Albertan Employment Rate went up because more people were looking for jobs and there were new jobs available. In November, unemployment dropped sharply to 6.5% with suggests things might be changing as fewer new people enter the job market. We expect unemployment will keep dropping slowly through 2026 in that market as population grows slows down. - Yeah, but that strong population growth that has been experiencing has helped a lot of people spend a lot more money. Of course, that's adjusted for inflation, but lower inflation and government tax breaks have also helped the province. The flood of new residents has increased demand for housing and construction. Housing starts, very important metric, which a lot of Canadian cities and provinces aren't hitting Alberta is. Alberta has up, housing starts are up 20% this year. And because of this, we expect home sales in Alberta to grow 6% this year. - Thank you very much for joining us on the first stop of the Canadian retur, Alberta. Kidding covered while Alberta is fundamentally practical for investors, strong incomes, affordable entry relative to wages, reliable cash flow opportunities and clear playbooks that reward operators who can execute. We walked Calgary's corporate anchor upside, Edmonton's cash flow stability, the promise of midsize hubs, and the high risk high reward dynamics of resource towns. - Yeah, look, I mean, the bottom line is, Alberta isn't overall glamorous, but it's real and it's practical and success comes from conservative underwriting, local market knowledge, discipline to operations, and of course, an actionable exit plan. If you're investing here, focus on cash flow, stress test your assumptions for any of the commodity shocks and focus on building power teams that know the market. Alberta, Calgary, Edmonton, Red Deer, Lethbridge, Camorri, we love you guys out there. We have had such great times coming out over the past several years and we're very excited to announce that we will be in Alberta. Probably multiple times this year for an unpacking multiplex event that we're really excited about, we're doing that across the country as well. And you know, I gotta be out there larkin' as a cowboy for the Stampeed. Dan, any fairer words, fond, faw and farewell words to our lovely Albertan listeners before we head out. - Oh, that's maybe Yeha or whatever it was you saying? Come on now. - Yeah, that's it. (laughing) - The content of this podcast is for educational and informational purposes only. It is not intended as financial, legal or investment advice. Always consult a qualified professional for advice tailored to your unique circumstances. The views expressed are those of the hosts and guests and do not necessarily reflect the opinions of affiliated organizations. Daniel Foch is a real estate broker license with Valerie Real Estate Inc. website is valery.ca, v-a-l-e-r-y.ca, and a member of the Canadian Real Estate Association, the Ontario Real Estate Association and the Toronto Real Estate Board. - Nick Hill is a mortgage agent and partner at Owl Mortgage License Number 10317 agent license M21004037.