When he was offered a job in British Columbia, Todd Kemper figured a potential loss on the sale of his house might be the price he had to pay to leave the Alberta market.
“I looked into my crystal ball and thought Alberta’s a one-trick pony – it always has been – and I do not see it performing well in the near- to mid-term,” Mr. Kemper said. “I thought if you can get out of this market now, do it. ... It’s inevitable that intelligent people can read the tea leaves and decide to get out.”
Thanks to more than a decade of volatility in Edmonton’s real-estate market, which started in 2009 with a housing-price correction and has continued with long periods of oil price fluctuations, Mr. Kemper’s house had not gained value over his seven years of ownership. He didn’t see that changing.
Instead, Mr. Kemper, who works as a scientist with the federal government, saw growing rancour between Alberta’s provincial government and its doctors and teachers, and few signs of economic hope in future.
He left Alberta in January, after he sold his Edmonton bungalow for the same price he bought it for in 2013. He considers himself lucky.
Analysts are divided on whether the growing anecdotes of professionals leaving Alberta is a bona fide trend that will affect its real estate market. Data on migration flows lag at least a year, and those now available predate both the COVID-19 pandemic and the results of public-sector cuts by the ruling United Conservative Party, which have mostly rolled out in 2020.
But as the province’s economy staggers through a prolonged downturn, magnified by the COVID-19 pandemic, some homeowners in Alberta’s professional class are choosing to exit the province and have accepted a loss, or will try to rent out their properties, to do so.
The factors many point to include not only the housing market itself, which is an outlier in Canada for its weakness, but also tough job prospects, a lack of faith that the oil and gas industry will recover and the tone of provincial discourse.
In April, 2019, Alberta’s UCP government was elected to replace the New Democratic Party government on a mandate to rein in public spending. The resulting cuts have been severe. The University of Alberta, for example, is now restructuring amid a reduction in provincial funding totalling $110.3-million for the years 2019-21. More than 1,000 people there have already been let go.
As the cuts have rolled out, drama has often followed. In March, Health Minister Tyler Shandro walked to Calgary doctor Mukarram Zaidi’s driveway and, allegedly, yelled at Mr. Zaidi over critical Facebook comments he had made about UCP cuts.
In July, a survey by the Alberta Medical Association found that 42 per cent of the province’s doctors are searching for work elsewhere. In a release, titled Looming physician exodus from Alberta, Christine Molnar, president of the association, said many have hit a breaking point.
“There are a host of opportunities for physicians across the globe. Alberta’s doctors aren’t practicing here because they have to, they practice here because they want to,” Dr. Molnar said in the release.
Position cuts led Carol Fenton, a medical health officer raised and educated with three degrees in Calgary, to look elsewhere for work. In late March, she accepted a job in B.C.
Dr. Fenton said she first attempted to rent her Calgary duplex, purchased in 2018, but could not find tenants at a rent that covered her costs. Dr. Fenton then listed the property for $5,000 less than she bought it for.
“We had, like, nothing – like, no action,” she said.
Dr. Fenton has now dropped the price by $30,000 but has yet to sell. “I’ve had two showings.”
She’s currently carrying both places and said she can drop the price further or rent for less than she pays on the mortgage. “Either way, I’m losing. But do I want an ongoing loss, or a one-time loss?”
Corinne Lyall, a broker with Royal LePage Benchmark in Calgary, said the city’s market has experienced a downturn as a result of COVID-19 but now, as parts of the provincial economy are reopened, it’s showing signs of recovery. Year-to-date sales are at just 7 per cent lower than they were in 2019, Ms. Lyall said, and some buyers are taking advantage of deals.
She said pent-up demand has boosted July sales. “In July, we’ve out-performed July of last year, and that’s because we had a delayed spring market because of COVID,” Ms. Lyall said.
Indeed, the Canadian Real Estate Association’s July report notes that sales are still rebounding from the effect of COVID-19. In Alberta, CREA numbers show sales are up in Calgary by nearly 16 per cent, month over month, and by nearly 10 per cent in Edmonton.
Still, some watching the market are less certain a recovery is coming. One is Barton Goth, an insolvency trustee with Edmonton’s Goth & Company Ltd.
Mr. Goth pointed out that Alberta homeowners with mortgages not secured with the Canadian Mortgage and Housing Corporation have the option to strategically default – similar to rules in the United States that led in 2008 to the phenomenon known as ‘jingle mail’ or the sound of house keys mailed to banks.
Mr. Goth said he has helped many use this option during housing downturns in the past but also said his business often lags market difficulties.
“My phone’s been pretty quiet now as people are focused on survival first,” he said.
He expects that to change. “I fear that all our talk of the anticipated recovery is simply masking the Canadian reality. We are sitting atop a house of cards.”
Mr. Goth also said he sees a brain drain taking place in Alberta. “I do know people who are looking to move outside the province.”
One person who left is Joyce Byrne, a magazine professional who recently moved back to Toronto.
But though Ms. Byrne has left Alberta, she’s still tied to its housing market.
She arrived in Alberta in 2005, bought her one-bedroom Edmonton condo in 2007, near the height of the 2006-07 housing bubble. She has rented out the property since 2014 when she took a job in Calgary.
Ms. Byrne bought her condominium for $250,000. Thirteen years later, units in her building are currently listed for $170,000, and not selling, she said. Compounding things, Ms. Byrne is currently between jobs.
Ms. Byrne said she struggled with the decision but she has now relocated to Toronto.
“I spent quite a bit of time thinking about whether I could stay in Alberta,” Ms. Byrne said. “The rent [I collect] is lower than I pay for it every month. My tenant is like everybody else – ‘Am I going to have a job?’ I just decided, I have to do something, and I can’t be tied there any longer because of that condo.
“I have my fingers crossed I can continue to carry it.”