Edmonton real estate is on the fast-track back to normalcy - Edmonton Journal

'The market is likely to stabilize as more product comes onto the market with more sellers listing as they see prices rise,' says realtor

Author of the article:

Joel Schlesinger  •  for the Edmonton Journal

Edmonton’s average price is expected to be more modest this year, growing by as much as 4.7 per cent over 2020 to about $389,000, says CMHC. Photo by File, David Bloom /Postmedia

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The city’s real estate market is expected to follow the national trend of increasing prices this year along with growing sales and new home starts, a new report predicts.

“The Edmonton market looks very similar to the picture nationally,” says analyst Christian Arkilley with Canada Mortgage and Housing Corp.

The crown corporation released its Housing Market Outlook earlier this month, forecasting housing sales and prices will rise significantly this year, and moderate in 2022 and 2023.

Nationally, the average home price could increase by as much at 15 per cent by the end of 2021 over 2020 to more than $649,000, led by markets like the Greater Toronto Area and Vancouver. As well, sales could grow by as much as nine per cent nationally.

Arkilley notes Edmonton’s average price is expected to be more modest this year, growing by as much as 4.7 per cent over 2020 to about $389,000. As well, sales are forecast to grow by as much as 16 per cent, year over year.

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“At the high end, the city could see about 22,400 sales up from about 19,400 last year.”

Yet sales are expected to decline slightly in 2022 and 2023, while the average price could rise modestly in 2022 and then fall slightly by 2023 to about $386,000.

Driving growth this year are low interest rates and continuing pent-up demand from the pandemic, especially as restrictions are expected to ease with vaccinations expanding and cases falling, he says.

“We expect that as immunization expands, we will see the economy open up more,” Arkilley says. “We expect travel restrictions to ease with international migration and the job market improving, and that will help boost demand for housing.”

Realtor Darcy Torhjelm, owner of Re/Max Real Estate (Edmonton), says Edmonton is among the most affordable major metropolitan areas in Canada.

“I feel prices may increase slightly from where they are at right now, but if you look at the highs from years past, we are still not reaching those heights as yet,” he says, noting prices are still below the high of reached in summer 2017.

Torhjelm further predicts the market is likely to stabilize as more product comes onto the market with more sellers listing as they see prices rise.

Further adding to supply are growing starts for new single-family detached homes — the heart of the market. Starts are forecast to grow by as much as about 31 per cent this year over 2020, again followed by moderating growth in the two years thereafter.

Multi-family starts are also expected to expand, but only modestly over 2020, up about eight per cent.

The muted growth in part reflects a lack of demand for condominium apartments, Arkilley says. The forecast also reflects ample existing supply of rental units on the market. Still, vacancy is expected to drop should more migration from workers and international students occur as the pandemic recedes as expected.

“Everything is so dependent on the vaccine and the economy opening up,” he says.

“If it does happen, there will be a significant positive impact on housing demand.”

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Edmonton real estate is on the fast-track back to normalcy - Edmonton Journal
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