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:

1. **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.
2. **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.

3. **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

1. **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.
2. **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.
3. **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.