Alberta and British Columbia are leading Canada’s next wave of real estate development, marking a shift in the country’s economic trajectory. Institutional construction investments across Canada rose by nearly 10% in 2024, with B.C. seeing the second largest increase. This growth is tied to the movement of people and businesses, as well as the diversification of key industries like technology, life sciences, logistics, and renewable energy.

Alberta, in particular, is attracting many new residents from other provinces seeking affordability and job opportunities. Calgary and Edmonton are driving Canada’s housing recovery, fueled by strong local demand and relatively lower costs. In contrast, B.C.’s high home prices and slower population growth are expected to keep sales below long-term averages.

A major factor in Western Canada’s growth is its pro-development environment. Unlike more bureaucratic markets like Toronto and Vancouver, municipalities in Alberta and smaller B.C. communities offer quicker approval processes, enabling faster development. This efficiency is appealing to developers and investors looking to meet rising demand, especially in multi-family residential, industrial, and mixed-use projects.

However, challenges persist. Tariffs and supply chain disruptions have raised concerns about construction costs, with early indications suggesting a 4-6% increase in hard costs. This has led to a more cautious approach, particularly for multi-family projects. Developers are now focusing on more affordable, quicker-to-execute projects like wood-frame townhouses and low-rise developments, which are in higher demand and carry lower risk.

Looking ahead, B.C.’s housing market will likely experience mixed results in 2025. While resale markets are expected to recover with lower mortgage rates, slower population growth and rising rental vacancies could create challenges. The large number of new high-rent units in Vancouver may push average rents up, but increased vacancies could put downward pressure on asking rents.

For sustainable growth, both provinces need infrastructure investments in roads, utilities, transit, and healthcare. Without these, Alberta and B.C. risk facing the same congestion and infrastructure issues seen in other markets.

In summary, Western Canada offers significant opportunities, but success will require careful planning, caution, and collaboration with governments and communities. If done right, it could set the standard for addressing Canada’s housing and economic challenges.