Is Edmonton or Calgary a safer bet for real estate investors?

Calgary or Edmonton? Which is the better bet? First of all, I have to mention that I was born and raised in the Edmonton area, so of course I am somewhat biased toward the City of Champions.

Looking at it objectively, though, I would still have to go with Edmonton, and here are the reasons why.

Top 5 reasons why I prefer investing in Edmonton over Calgary;

1. Edmonton is more diversified economically; in this City of just under $1m, The University of Alberta has 40,000 students. It’s also the Provincial Capital, employing thousands of government workers who aren’t as susceptible to oil price swings. As the head office to most major oil companies, Calgary is heavy on Energy industry executive positions, which are typically the first to get chopped when the industry takes a dip.

2. Edmonton has slightly higher cap rates. Multifamily cap rates hover around 5 -6% in Edmonton, vs. 4% to 5% in Calgary

3. Edmonton has better cash flow. The average home price in Edmonton is $370,000. Although rents are slightly lower than in Calgary, we typically find it easier to find good cash flowing properties in this market. Calgary can be tough due to average sales prices hovering around $465,000

4. Blue collar vs. White collar. The Edmonton labour market is less prone to recessions due to the fact that it is a blue collar city. Blue collar jobs are always in demand, even if the pay comes way down during a recession. White collar oil executive jobs simply aren’t.

5. Edmonton has more inventory of multifamily rental properties. Edmonton has a pool of about 2000 buildings to choose from, whereas Calgary has far fewer to choose from. More inventory equals more opportunity for savvy investors to break into the market.

I’m not saying that Calgary isn’t a good market for real estate investors. In fact, I would recommend Calgary as a solid “buy” at the moment. I just think that Edmonton has a few advantages in the long run over it’s sister to the South.

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