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    Edmonton's Fall 2017 Housing Market Forecast Cityscape image

    Edmonton's Fall 2017 Housing Market Forecast

    Topics: Financial & Mortgages
    Posted on August 29, 2017 by Kirsten Warwick

    Trying to predict the future is always a difficult thing, but we've looked at reports and statistics from all relevant stakeholders to give you the latest intel about this fall's housing market situation in Edmonton.

    In 2016, Edmonton became the biggest buyer's market in Canada with the average home price dropping more than any other city in the country. In the last three months of 2016 alone, housing prices dropped 2.1% to an average of $378,248 according to a real estate housing price survey

    Breaking down the statistics further, single family homes in Edmonton dropped 5.4% compared to 2015, condo sales were down 14%, duplex or row houses were down 8.3%, and all residential sales dropped 6.7% from 2015.

    This was in sharp contrast to areas like Vancouver and Toronto which saw prices rising 13% with an average home price of $558,153. Nonetheless, a few communities in Edmonton saw a slight improvement in single-family home sales, including Summerside, Windermere, and The Hamptons. Row or duplex house properties did well in the Walker, Chappelle Area, and The Hampton areas of Edmonton as well.

    At the end of 2016, the REALTORS Association of Edmonton forecast a similarly sluggish market for 2017. The initial forecast was for a 1.7% decline in single-family home sales in 2017 with average home prices remaining between $325,000-425,000.

    Edmonton's Fall 2017 Housing Market Forecast House Graph image

    The First Half of 2017

    Surprisingly, the REALTORS Association of Edmonton reported on July 6, 2017 that residential average prices for June were up 3.74% compared to the prior month and up 4.19% for the same period the year before. 

    Nonetheless, the good news is the summer months are expected to see large numbers of new homes coming on the market. The number of homes for sale in June 2017 was up 6.24% compared to the month prior and 6.55% compared to the same period last year.

    "Affordability and value are key drivers across all property segments,” said James Mabey, the chair of the REALTORS® Association of Edmonton. “Buyers can be discerning, but with stable prices and potential interest rate increases around the corner it is important for buyers to get off the fence."

    Other sources reported similar news. Royal LePage conducted a housing price survey in April 2017 that showed the average price of Edmonton-area homes had increased by 0.3% in the first quarter of 2017 for an average price of $381,733. And international markets pushing oil prices upward were predicted to result in an increase in home prices.

    Edmonton's Fall 2017 Housing Market Forecast Blocks imageThe Fall 2017 Forecast

    Mortgage rates remain quite low as of yet. The recent OPEC meeting at the end of May 2017 saw an agreement amongst OPEC member countries to stabilize oil prices for the near future, a move that bodes well for home prices in Edmonton and across Alberta. This is something to really take into account when pricing for your new home

    Another key factor expected to help boost home prices in Edmonton is the new mortgage rules put into place in October 2016 by the Liberal government. 

    The new rules require that borrowers can pass a "stress test," proving that they have the financial means necessary to pay higher interest rates than are currently being offered. Other new regulations include a requirement that home buyers put down at least 5% of the purchase price of a home or 10% for homes valued above $500,000, designed to ensure only qualified buyers enter the market. This is a huge consideration to make when buying your first home.

    However, Huffington Post Canada stated that the new rules are having a positive effect in Alberta. The chief economist of Mortgage Professionals Canada, Will Dunning, reported that home sales in Alberta are on the rise as compared to previously hot markets like Toronto, and Vancouver which are now seeing strong downward trends.

    One key indicator that the 2017 fall quarter in Alberta should see positive growth was the recent news that more luxury homes were sold in Edmonton than during the same period over the past four years. A total of 33 properties in Edmonton valued at $1 million or more were sold in the city during the first three months of 2017 compared to just 20 in 2016 and 19 in 2015.

    Mabey responded to the news by saying, "[This] is a healthy indicator of an improving real estate market [in Edmonton]" and that "If we are seeing that entry-level housing market start to move, and we have seen good strengths in those sales numbers of the entry-level product, that will help to cascade up into the market so we’ll see the mid part of the market move up as well."

    The Bottom Line

    A combination of vigorous improvements in new home starts, stable oil prices, an improved balance between demand and supply, and the effects of the October 2016 mortgage rules should lead to a slight increase in both home sales and average home prices in Edmonton and across Alberta.

    Photo credits: cityscape, house graph, blocks
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