It has been a roller coaster ride for the Edmonton housing market throughout the COVID-19 public health crisis, with plenty of highs and lows for one of the largest urban centres in Canada. At one point last year, it became the country’s most affordable real estate market. The province of Alberta’s capital is expected to continue going through peaks and valleys, but whether it is the top or the bottom might depend on if you are buying or selling.
At the beginning of the coronavirus pandemic, the Alberta real estate market was being left behind as nearly every facet of the Canadian housing industry enjoyed record-setting gains in sales activity and prices. Months later, with the energy sector booming again and the national economy recovering, Edmonton had started to return to its glory days – and, no, not the Edmonton Oilers’ Stanley Cup days!
But the blazing Edmonton real estate market could be doused as new inventories come online. Is this a brief buying opportunity or part of a broader downturn? Many are thinking about it as a last chance for homebuyers to get a deal on the property of their dreams before prices soar to 2019 levels!
So, what is truly going on in the Edmonton housing market right now? Let’s take a peek behind the curtain.
New Listings Bring Relief to the Edmonton Housing Market
According to the REALTORS® Association of Edmonton, residential sales advanced at an annualised rate of 137.1 per cent, led by condominium units (+161.7%), single-family homes (+136.7%), and rowhouses (+118.7%).
Edmonton real estate prices also recorded massive gains year-over-year, with all residential average costs rising 13.4 per cent to $401,390. Of the real estate categories, this is what prices looked like in May 2021 compared to the same time a year ago:
- Single-Family Homes: +12.9 per cent to $465,551
- Condominiums: +18.4 per cent to $241,885
- Duplexes: +10.1 per cent to $358,195
Overall, MLS® Home Price Index (HPI) composite benchmark price, which is considered more accurate than average and median pricing, climbed 9.3 per cent to $347,800.
But while the primary headlines emphasise the annualised gains, the real story could be the increasing inventories that have eased prices.
New residential listings surged 140 per cent year-over-year in May and slipped 2.1 per cent month-over-month. Total housing stocks in the Greater Edmonton Area (GEA) jumped 7.6 per cent from April 2021. The result was a decrease in month-over-month sales activity and a slowdown in price growth.
For example, single-family property prices rose a tepid 1.6 per cent in May from the previous month, while duplex home valuations edged up 3.1 per cent from April.
“The Edmonton market in May saw a significant increase in year-over-year residential unit sales,” said REALTORS® Association of Edmonton Chair Tom Shearer in a statement. “There have also been more sales of single-family homes, condos and duplexes compared to May of last year, while month-over-month activity has started to cool off compared to April. While we need to keep in mind the drastic difference between 2020 and 2021, we are witnessing a strong market heading into the summer.”
More housing relief could be on the way, too. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts advanced 1,060 in May, up from 670 in the previous year. In the first five months of 2021, housing starts are close to 5,000. Completions close to doubled year-over-year in May, and total absorptions increased 681.
Is Edmonton Drawing in Out-of-Province Buyers?
As the Edmonton real estate market continues to boom, one of Canada’s largest urban centres is also attracting homebuyers from outside the province. This has been an exciting turn of events for Edmonton, particularly after the city and the broader region were one of the few housing markets not to post a considerable increase in the aftermath of the first wave of the coronavirus pandemic. From cratering crude oil prices to a sharp economic downturn, the Alberta real estate market plummeted in the second quarter of 2020.
What a difference a year can make.
Edmonton is still an affordable urban real estate market compared to blazing housing sectors in the Greater Toronto Area (GTA), the Greater Vancouver Area (GVA), or even Atlantic Canada. As previously mentioned, the average residential property is selling for around $400,000. The national average is north of $700,000, and getting started in the real estate market in places like Toronto, Vancouver, or Montreal comes with a price-tag of about $800,000.
John Carter, a broker and owner of RE/MAX River City, summarised the affordability of the city’s housing market in a recent interview with the Edmonton Journal: “Here, a dual-income family can buy a brand new house, lease two new cars and still have disposable income.”
This would be a dream for many young families and households who are earning a decent salary but have been shut out of the Canadian real estate market before and during the COVID-19 pandemic.
Will a growing number of homebuyers now call Edmonton their new home? If so, it is time to saddle up, grab your Oilers hockey jersey, and embrace the beautiful and diverse landscape of Alberta’s capital city!
The post New Listings Bring Relief to the Edmonton Housing Market appeared first on RE/MAX Canada.