Real Estate
Edmonton Housing Market Forecast: Insights for 2024
Edmonton Housing Market Forecast: Insights for 2024
Recent Market Trends
Over the past year, the Edmonton housing market has experienced significant changes. The average sale price saw a 4.3% drop, declining from $418,713 in 2022 to $400,827 in 2023. Concurrently, the number of sales fell by 11.4%, from 22,388 transactions in 2022 to 19,825 in 2023. Despite these declines, the market remains balanced, although experts predict a shift towards sellers’ conditions in the upcoming year.
Projections for 2024
Looking ahead to 2024, several key trends and predictions are shaping the Edmonton housing market:
- **Price and Sales Forecast**: Average residential prices are expected to increase by 4%, while the number of sales transactions is anticipated to drop by 5%. This indicates a tightening market where demand could surpass supply.
- **Desirable Neighbourhoods**: Three areas are set to be the most sought-after in Edmonton for 2024:
– **Oliver/Downtown**: Favoured for its lively urban environment and proximity to key amenities.
– **Rutherford/Heritage Valley**: A modern development in the deep south, known for its contemporary housing options.
– **Terra Losa**: Located north of the West Edmonton Mall, this neighbourhood is gaining popularity for its convenience and accessibility.
- **Single-Detached Home Demand**: Single-detached homes are predicted to be in high demand. However, the focus on new, denser construction developments, along with the rising cost of living, is influencing buyer preferences. In-home rental suites, including short-term rentals, are becoming a significant consideration.
Influencing Factors
Several factors are driving these market trends:
– **Interprovincial Migration**: A significant influx of people from Ontario is affecting Edmonton’s housing supply and creating competition for entry-level properties. This migration is largely due to Edmonton’s relative affordability compared to other major Canadian cities.
– **Immigration**: Edmonton’s attractiveness is also drawing immigrants directly to the city, bypassing traditional destinations like Vancouver or Montreal. The ability to secure a new construction home within two years of arrival is a distinct advantage that Edmonton offers.
– **Interest Rates**: Rising interest rates have cooled the market somewhat. However, Edmonton’s status as one of the most affordable major cities in Canada, combined with high overall incomes, is helping to stabilize property values.
Key Trends to Monitor
- **Shift to Sellers’ Market**: Edmonton is expected to transition from a balanced market to a sellers’ market in 2024, driven by rising demand and limited supply.
- **Interest Rates and Migration**: The interaction between rising interest rates and interprovincial migration, particularly from Ontario, will play a crucial role in shaping the market.
- **First-Time Homebuyers**: Unlike more expensive move-up markets, first-time buyers in Edmonton are actively purchasing condos under $200,000 to enter the market. However, interest rate hikes have reduced their buying power, making affordable entry-level properties highly desirable.
Conclusion
The Edmonton housing market is set for notable changes in 2024. With rising prices, strong demand for single-detached homes, and shifting buyer demographics, the city presents a dynamic and evolving landscape for both buyers and sellers. Whether you are looking to invest, buy your first home, or move up the property ladder, staying informed about these trends will be essential in making the best decisions in the coming year.
Canada’s Most Affordable Real Estate
The benchmark home prices in Edmonton places it ahead of many other cities due to its affordable real estate market. A local realty firm has conducted a study of median incomes in 15 major markets throughout Canada. They have compared them to the benchmark home prices in these cities.
The maximum mortgage amount was calculated for those with median incomes in the city. They later compared the maximum mortgage to the benchmark home rate in the same city to determine if it would be a large amount to then buy. In short, at least eight cities were considered affordable. This meant that people would be able to qualify for a mortgage that would cover the majority of the cost and they could save enough for a down payment in less time. The most affordable cities include Edmonton, Regina, Winnipeg, Saskatoon, and Halifax-Dartmouth.
Edmonton ranked ahead of Calgary. It’s benchmark price is $321,300 with a median income of $94,447. Based on this information someone in the market for a new home or business would qualify for a mortgage of $317,344. This would require a down payment of roughly $16,000. It would cost the buyer almost a years savings or 20% of pre-tax income. This is reasonable for most new homebuyers. The benchmark price of a house in Calgary, which ranked sixth, is $420,500. The median household income is approximately $99,583 before taxes. This means that the median mortgage would be $415,454. If the homebuyer were to save 20% of their household income, it would take one year for them to save 5% of the price for their down payment, which would be approximately $21,000.
Most of the cities in the report were considered affordable but seven of them were not. The ones that were not considered affordable include St. Thomas, London, Kitchener-Waterloo, Hamilton-Burlington, Greater Vancouver, Greater Toronto, Victoria, and Fraser Valley. There is becoming a wider disparity between what is affordable and what is not affordable. This is based on the benchmark findings. Greater Vancouver was the least affordable market surveyed. It has a benchmark price of $993,300. However, the median income in Greater Vancouver is lower in some of the prairie provinces with an average rate of $72,652. This means that homebuyers with this amount of income will qualify for a mortgage of $241,994. To complete the deal the homebuyer would need to come up with a down payment amount of $751,306. This is 76% of the home price. This definitely isn’t the ideal situation for a homebuyer.
Fraser Valley was the second least affordable market where buyers would have to save for 42 years to purchase a home. In Greater Toronto, homebuyers would have to save for 32 years to purchase a home. The benchmark price on average in all the cities in the study was $627,400 with median prices of $70,336, which means they would qualify for a $280,703 mortgage. This would be enough to account for 55% of the price.