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Calgary has one of the highest median household incomes in the country, plus big city amenities combined with great geography.Kevin Van Paassen/The Globe and Mail

The clock is ticking on one of the best remaining bargains in Canadian real estate.

Oil prices are rising, which generally means good things for the economy of Calgary. Expect to see some strength in a housing market that has completely missed the pandemic real estate boom.

House prices have risen to levels over the past 12 or so months where some young adults are forced to move to other cities. If you’re priced out of Vancouver, Calgary is a natural place to look. But Ontario residents have tended to look in-province or to the Maritimes for cheaper housing.

Calgary, and other Western cities, should be on the list of possible destinations, too. Calgary has one of the highest median household incomes in the country, plus big city amenities combined with great geography. And, by the standards of Toronto, Vancouver and lots of other cities, the houses are affordable.

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A recent report for Alberta Central, serving the province’s credit unions, identified Toronto as the most overvalued city in Canada, followed by Ottawa, Montreal and Vancouver. At the other end of the spectrum, the report found no signs of overvaluation in Edmonton, Winnipeg and Calgary. “We have some good values in Western cities,” said Charles St-Arnaud, chief economist at Alberta Central.

The Canadian Real Estate Association says the national average resale house price jumped 38.4 per cent in May to $688,208, while Calgary prices rose 11.3 per cent to $441,600. The average Ottawa and Toronto resale home prices in May were $653,600 and $1,045,800, respectively, while Vancouver averaged $1,172,800.

You can find houses at half the price of Calgary in some Maritime cities and towns. Take Saint John, which was featured in a housing-focused episode of our Stress Test personal finance podcast for Gen Z and millennials. Saint John has a lot going for it, but some negatives came up in a recent thread on the online forum Reddit. Health care, taxes and a lack of tradespeople to repair and renovate homes were mentioned.

In Ontario, prices in small cities have risen to levels that make Calgary competitive. Windsor’s average resale price hit $551,915 in May, while London hit $586,200 and locations in the Rideau-St. Lawrence region of Eastern Ontario averaged $489,149.

Calgary is an affluent city with cheap housing. It led Canada in median household total income at $99,583 in the last census, in 2016, while Saint John came in at $63,737, Toronto at $78,373 and Vancouver at $72,662. This helps explain why the city scores well in a key affordability measure – the percentage of household income needed to pay the mortgage. And this is in a province with no provincial sales tax.

The Alberta Central report says the average Canadian family would spend about 24 per cent of its income on mortgage payments for an average home bought with a 20-per-cent down payment, with Vancouver on the high end at 36 per cent. Edmonton and Calgary are in the 11-per-cent to 13-per-cent range.

What makes Calgary housing affordable is an economy that has been depressed by low oil prices. The price of oil has soared in the past year, but Mr. St-Arnaud said the energy sector has been cautious about reacting to the recent jump in oil prices by hiring and making new investments. A Toronto- or Vancouver-style real estate boom may not be on the horizon, but prices are finally on the rise.

The energy-based economy in Calgary raises questions about how varied employment opportunities are for people unable to work remotely. Mr. St-Arnaud said he’s optimistic about Calgary’s future because of a growing understanding of the need to diversify the economy by bringing in new industries such as tech. Still, the economy is tied to oil and people moving there should be aware of that.

Central Canadians should think of the Calgary lifestyle as being similar to Ottawa, he said. “They’re cities that are big enough where you have everything you need around, yet small enough that you don’t feel overcrowded and you have lots of green space. They’re very similar in quality of life.”

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