Buying a house costs a lot less in Edmonton than Calgary. Why is that?

Three hours on Alberta's QEII highway can make a $200,000 difference in the price of a home.

If you want to own a detached house in Calgary, average prices are currently just shy of $700,000.

Three hundred kilometres north, similar properties in Edmonton will run you a bit less than $500,000, on average.

And if you're a renter, you can expect to shell out $2,150 per month for a two-bedroom apartment in Calgary. In Edmonton, monthly costs have been rising, but they're still roughly $500 less, according to Rentals.ca.

Benchmark residential prices between the two cities have grown further apart, with Edmonton costs staying essentially flat compared to the same time last year, while they've shot up more than 10 per cent in Calgary, even with rising interest rates.

Across all housing types — detached, semi-detached, townhouses and apartment condominiums — the average selling price of homes in Edmonton was about $398,000 in August, compared to $570,000 in Calgary.

So what's driving these differences in housing costs between Alberta's two biggest urban centres? Here are some of the factors behind the affordability gulf.

People have been flocking to Alberta this year. In just the first three months of 2023, the province welcomed nearly 16,000 people from other parts of Canada. 

Real estate agents say prospective homebuyers looking to the Prairies after getting priced out of Toronto or Vancouver tend to consider Calgary first.

It's slightly larger than Edmonton and a major travel hub that people might have passed through or visited before.

"Calgary just does a better job of putting themselves on the radar," said Tom Shearer, broker for Royal LePage Noralta Real Estate, which has offices in Edmonton and surrounding communities.

"People are looking for more affordable housing or places where they can start their families … they start investing in, 'What's the next biggest centre I can go to?'"

The Rockies also loom large in buyers' decisions about which city to call home. Kananaskis and Banff are only a short drive from Calgary. Edmonton real estate agents say that easy access to an outdoor lifestyle is just too tempting for many buyers.

Edmonton real estate agent Leanna Martens says some buyers are making different choices about quality of life, considering the current cities' price differences.