Calgary is for you if you live in a high-cost city and want cheaper housing with no compromise on lifestyle.

In Calgary, you have an urban vibe, a beautiful natural setting, high incomes and houses at half the price of Toronto and Vancouver. Even compared with Ontario towns such as Barrie, Guelph and Windsor, Calgary’s a bargain.

Calgary is the corporate engine of Alberta, a province so economically strong that its Premier wants to exit the Canada Pension Plan and set up a provincial counterpart that, according to government claims, could cost less and pay more. But real estate values speak loudly in this housing-obsessed country. How can Calgary be so great – and so cheap?

The average resale home price in Calgary in October was $555,400, compared with a national average of $656,625 and an average of just over $1-million for Vancouver and Toronto. Windsor, adjacent to Detroit and a four-hour drive from Toronto, had an average price of $572,600.

Calgary’s housing market has consistently trailed that of perennial price leader Vancouver, but there have been periods when it muscled Toronto out of second place. In 2007, the average resale home price in Calgary was $414,066, compared with $377,029 in Toronto and $570,795 in Vancouver. In the early 1980s, Calgary also ranked ahead of Toronto.

The volatility of the energy sector, which drives Alberta’s economy, helps explain why Calgary lags on home price growth. But there’s another reason, and it leads to a surprising conclusion. In its comparative tameness, Calgary real estate exemplifies a rational, balanced market where the supply of homes meets the demand.

Charles St-Arnaud, the chief economist for Credit Union Central Alberta, says Calgary has a history of out-building Toronto on a per-capita basis. For the first half of 2023, Canada Mortgage and Housing Corp. numbers show Calgary built hundreds more detached houses than both Toronto and Vancouver.

The oil industry has created a lot of wealth, and workers have migrated to Alberta as a result. “But you didn’t have the same constraint on supply as you had in other major cities like Toronto or Vancouver, and so you didn’t have that big an increase in prices,” Mr. St-Arnaud said.

Calgary’s average home price puts it well below Ottawa and in the same range as Halifax and Montreal. But Calgary has one of the highest median after-tax household income levels in the country, while Alberta ranks first among provinces.

Mr. St-Arnaud dismissed the idea that the city’s tame real estate market offsets the narrative of provincial wealth. “You can see and feel the wealth in Calgary even though you don’t have skyrocketing high house prices,” he said.

Despite its nickname, Cowtown, the foundation of Calgary’s wealth is the energy industry, which is vulnerable to drops in the price of oil and natural gas. Oil prices plunged in 2008 and weakened again in the middle of the next decade. Calgary house prices stagnated or declined during these periods, while prices in Vancouver and Toronto stayed strong for the most part.

Mr. St-Arnaud said Calgary’s economy is less dependent on energy than it used to be. Energy companies are running leaner on staffing, while sectors such as health care have been contributing new jobs. “There’s probably less chance that if you have a downturn in oil that suddenly you’ll have a lot of people who are affected by losing their income,” he said.

Job opportunities have long drawn people to Alberta from other parts of the country, and affordable housing adds to the attraction. From July 1, 2002, through this past July, Alberta experienced the biggest annual net interprovincial population gains since data began being collected in 1971-72.

Calgary home prices reflect this influx of people. The average resale home price jumped 9.3 per cent on a year-over-year basis in October, compared with a national average of 1.8 per cent.

“For someone who lives in Calgary who is looking at buying, maybe it’s getting expensive,” Mr. St-Arnaud said. “But in the grand scheme of things, when we compare to other cities in Canada that are grossly overvalued, Calgary is still way reasonable.”

Mr. St-Arnaud may be onto something here. Maybe the question isn’t why Calgary houses are so comparatively cheap, but why other markets aren’t as normal.

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.