Gap is tightening
Great news: Edmonton is playing catch up
You’re invited to: Why Alberta Now Zoom CallSee details at the end of today’s newsletter.
The day is finally here.
Historically, Edmonton real estate tend to follow Calgary in about 18-24 months.
If Calgary rent goes up, Edmonton follows.
If Calgary property price goes up, Edmonton follows.
In about a year and half.
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We started to see the gap between the 2 markets widen back in 2022-2023.
The gap got so wide with both price and rent that it startled some people in the Edmonton real estate investment circle.
Some wondered if the gap will ever tighten.
I heard an argument few months ago saying that because Calgary is turning into a US styled market, a premium market because it’s a highly desirable place to live.
While I agree Calgary is a highly desirable place to live, I may also be biased because I happen to live here, but when it comes to investing, there are more factors to consider besides my personal opinion on how desirable a place is for myself to live.
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A common mistake I see newbie investors make is investing based on their personal preference to live in a place.
I understand the emotional appeal, if it’s something I like, others may like it too.
But that’s not what a smart investor does.
A smart investor doesn’t make investment decisions solely based on emotions.
If you’re a Tesla fan but you saw a Ford on sale for 50% off, you may not WANT a Ford, but a smart investor will still buy it and flip it for twice the money in short few days.
Putting all emotions aside.
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At some point, the rubber band is going to be stretched so much, with a tension built so high that the rubber band will contract with the pressure released.
This is how I see the Alberta market compared to the many Canadian real estate markets over the past few years.
This same thing applies to how I see the Edmonton market compared to Calgary.
At some point, the pressure will be released.
We are now seeing signs of that happening.
What few may realize is that the early release of pressure tend to create some of the biggest gains.
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Today, I’m going to spotlight the gap is tightening on rent between the 2 markets.
It wasn’t a dramatic change compared to the huge jump in rent in Calgary couple years ago.
This means, unless you are closely watching the market, it’s something people may not notice looking from the “outside”.
Take a look at the chart yourself.
Notice the slope for Edmonton rent growth (bottom dotted red line) is steeper than Calgary (upper dotted red line)? That’s how the gap is starting to narrow.
The 2 solid red lines are references to the June 2023 baselines.
Whenever you see something like this, it creates opportunities.
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Now, here’s the good news and great news:
Good news: This market shift to Alberta due to population movement is unprecedented and historical. That means people still have a chance to get into Alberta real estate, and buckle up for the ride.
Great news: Edmonton is kicking in, if you are kicking yourself for missing the big increase in Calgary, you’re getting a second chance with Edmonton.
Smart investors are like surfers. They swim to where the next wave is going to be and try to catch it.
My investor partners have positioned themselves for the upcoming growth in Edmonton.
They are smart! They know the wave is about to arrive and they got in.
You’re invited to: Why Alberta Now Zoom CallIf you’re interested in learning about why I’m bullish on Alberta, this call is for you.
I will be covering data and my analysis on the Alberta real estate market.
This is the same presentation I’ve given to a small group of people a little while ago.
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Are you invested in Edmonton?
What have you noticed about the market? What’s your thoughts on the Edmonton or Alberta Real Estate market?
Reply to this email to let us know.
Reader’s comments from last week’s newsletter: Saw this on Facebook
Great read Eric!! And yes, I got stuck!! I was doing really well until a family member said one comment to me and all of a sudden I got emotional …I experienced FOMO and regret the buy!! So instead of living in regret I decided for the last 14 months to educate myself, network, and understand real estate cycles - Reader Tammy C.
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Definitely listening - Reader Rory H.
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Eric’s comments: I’m glad you’re listening and studying the market Rory & Tammy. You won’t want to miss my upcoming Zoom call to share some data points I’m tracking and why I’m bullish on the Alberta market.
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Eric Chang
Calgary, AB
July 23, 2024
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