Edmonton home sales expected to cool into 2024

image

Article content

Edmonton’s resale real estate market has muddled through much of this year with declining sales amid higher borrowing costs, and a new report suggests sales are likely to continue declining next year.

“The challenge has been the Bank of Canada,” says Chris Alexander, president of Re/Max Canada, which last month released its 2024 Housing Market Outlook.

Article content

The Re/Max report expects the Bank of Canada is likely to cut interest rates slightly in 2024, but the overall impact will probably be muted in most markets, including Edmonton.

Article content

That said, Alberta’s capital has a big advantage over most large Canadian cities.

“Edmonton is among the most affordable markets in Canada,” Alexander says.

The Re/Max report illustrates this point.

As of Oct. 31, the average price of a home in Edmonton was about $401,000, down about four per cent from the same time last year. Driving that decline has been falling sales, down about 11 per cent year over year.

In contrast, Calgary’s average price increased three per cent to about $548,000, even though sales fell by 12 per cent from Jan. 1 to Oct. 31 compared with last year.

Re/Max did predict that while sales in 2024 will fall five per cent from 2023 in Edmonton, the average price would climb four per cent to about $417,000.

Local realtor John Carter says Edmonton’s market arguably has fared better than markets like Toronto due to its affordability, which has attracted a lot of inter-provincial migration.

“Edmonton, and Alberta, is experiencing record migration,” says the realtor with Re/Max River City. He points to the city seeing about 40,000 new residents in 2022. What’s more, from July to the end of September, the province saw net migration of more than 45,000 people, provincial government statistics show.

Article content

That trend is expected to continue for the remainder of the year and into 2024 so long as the economy remains strong, Carter predicts.

Yet high borrowing costs remain a headwind, especially in the higher price ranges — $600,000 and up — keeping buyers and sellers on the sidelines, Carter says.

“Many have seen their buying power significantly impacted by the rise in rates.”

In turn, prospective buyers are waiting for rates to come down, he adds.

Meanwhile, those who can buy in higher price segments are likely to benefit as sellers become increasingly willing to cut list prices, Carter says.

It’s a different story, however, for lower priced homes, especially single-family detached homes — under $500,000.

“It’s an extreme seller’s market,” Carter says. “There are not enough properties in that price point to meet the buyer demand.”

While first-timers make up the majority buyers in this part of the market, others are investors from British Columbia and Ontario seeking to purchase homes as rental properties.

That said, not all out-of-province buyers are investors; many are moving to Edmonton for its lower cost of living. As the Re/Max report shows, the average price of a home in the Greater Toronto Area was about $1.13 million this October, despite falling about six per cent year over year. That is nearly three times the cost of the average home in Edmonton.

A growing number of out-of-province buyers recognize the bargain at hand in Edmonton — one that is unlikely to last much longer, Carter predicts.

“Many I am talking to see the next six to nine months as a window of opportunity when prices will possibly be at the lowest they may ever get in Edmonton for the foreseeable future.”

Share this article in your social network

Sign up to receive the best Underground art & real estate news in your inbox everyday.

We don’t spam! Read our privacy policy for more info.

This post was originally published on this site