Edmonton is the capital of Alberta, which is one of Canada’s more significant provinces.
With a population of just over 1,000,000, it is the sixth largest city in the country. A central hub for petrochemical industries based on Alberta’s massive oil, gas, and oil sands reserves, the city is called both the “Oil City” and the “Gateway to the North.”
An Urban Parkland
Located on the famed prairies of Canada, the city sprawls on the banks of the North Saskatchewan River. The river and its tributaries have carved multiple ravines in and around the area, making the North Saskatchewan River valley the longest stretch of connected urban parkland in North America. Edmonton has more parks when compared to other cities in Canada.
Edmonton hosts over 50 festivals annually, earning it the moniker of “Canada’s Festival City.” Some celebrations include the K-Days, the Edmonton International Street Performer’s Festival, the Edmonton International Fringe Festival and the Silver Skate Festival.
Although most of the population is Caucasian, about 25 percent belong to the ethnic minority. Many migrant workers are attracted to the city as it is a central petrochemical hub. The fact that Edmonton is one of Canada’s sunniest cities is also a significant factor, as is the cultural diversity.
A Mix of Culture, History and Recreation
The city appeals to everyone because of its natural beauty, culture, history and attractions. It housed North America’s largest mall – the West Edmonton Mall, the Fort Edmonton Park and the Royal Alberta Museum.
The Calgary–Edmonton Corridor comprises 70% of Alberta’s population and includes the entire metropolis of Calgary and Edmonton. One of the most rapidly growing and richest regions in Canada, this area is a fair rival to the urban charms of Toronto, Ontario. However, compared to other real estate markets in the country, first-time homebuyers will find home prices in this corridor are still quite affordable.
Greater Edmonton Area
Situated to the north of the corridor, the Greater Edmonton Area (GEA) includes Beaumont, Fort Saskatchewan, Leduc, St. Albert, and Spruce Grove, in addition to Edmonton and several districts and towns. The Realtors Association of Edmonton, an offshoot of the Canadian Real Estate Association, serves the GEA and the surrounding larger communities.
Edmonton’s economy is one of the most diverse, with Alberta’s oil and natural gas extraction creating many jobs. The major industrial sectors encourage a strong technology sector, which enhances the city’s reputation as one of Canada’s foremost research and education centres.
In addition, the city enjoys moderate taxes and the lowest gasoline and diesel prices in Canada. With the cost of living rising all across the country, Alberta’s affordable real estate attracts many interprovincial migrants.
Edmonton’s Real Estate Market
Canada’s most significant metropolitan areas are Toronto, Montreal, Vancouver, Ottawa, Calgary and Edmonton. Real estate professionals expect home prices to show an upward trend in all these areas. The Edmonton real estate market is among the country’s top three most undervalued cities.
Due to increased mortgage rates, the year-over-year sales in the GEA dropped by 4.9% in June 2022 compared to June 2021. However, Edmonton home prices remained relatively stable, and in the long run, housing market experts predict a price growth in 2022.
A Shift in Trends
The housing market in GEA shifted into a seller’s call last year, fueled by low supply and high demand. Overall, Edmonton housing market prices have generally been increasing since February 2019. They declined in the second half of 2021 but have started growing again in recent months.
Lower home prices and in-bound migration drive this trend toward new home construction and suburban neighbourhoods. It is a seller’s market; new home values and resales will continue to rise over the long term.
Experts at the Realtors Association of Edmonton report that the MLS® Home Price Index (HPI) composite benchmark price in the GEA came in at $416,700, an 8.3% increase from June 2021.
Condominium sales increased 1.8% from June. Semi-detached unit sales were down 4.7% year-over-year and 11.6% from last month.
Average Price of Single Family Homes
The average sold price of a house in Edmonton was around the $406k mark in June 2022. A single family detached home averaged $500k, while condos sold for an average of $233k, a slight decrease since last year.
New listings saw an increase of 4.1% from June of last year.
In the GEA, single family homes sold at an average price of $494k, while the average sold price of a condo was $238k. Duplex prices increased 9.1% from June 2021, trading at $387k.
Lingering Effects of Covid
The pandemic has a lingering impact on the housing market, with developers and authorities scrambling for land development. The supply chain faces disruptions, and labour shortages are still ongoing, slowing down new construction.
With these shortages, the area continues to see an increasing demand for new single family detached homes or condos.
Outlook for Edmonton Housing Market
Though national home sales fell by 5.6% month-over-month in June 2022, the number of new listings was up 4.1%. The MLS® Home Price Index (HPI) composite benchmark price was still up 14.9% year-over-year. The national average home price is expected to rise by about 3.1% annually to $786,282 in 2023.
Working from home makes it convenient for people to move to more affordable cities while continuing their jobs. In addition to interprovince migrants pursuing career opportunities, there are also buyers looking for high-growth investments.
Increases in the Bank of Canada’s interest rate will influence variable and fixed mortgage rates, with the trend of low mortgages finally coming to an end. Experts predict that higher mortgage rates will not discourage homebuyers, though they may re-evaluate how much they can afford.
At present, borrowing costs and rising interest rates are the primary factors affecting the housing market. Nevertheless, the shortfall in supply has not gone away, and while home sales are down, the gaps are reducing.
Demand for homes for sale is only going up, with many investors eyeing real estate investment opportunities. They can expect to generate cash flow with the increasing home rents in the Edmonton market.
A few may wait and watch as the dust settles in the wake of recent rate hikes, but the savvy investor will make adjustments and prosper.
First-time homebuyers are advised to seek the expertise of their local Realtor. If you’re looking to buy or sell property, contact us, and we shall help you successfully navigate the real estate labyrinth.