Selena’s October 2023 Newsletter

One question we get asked on a daily basis is what is happening in Real Estate. As we sell houses every day we are constantly immersed in what is going on and can provide unique insights for the Edmonton market but real Estate is bigger than just Edmonton so we like to check headlines for articles relating to Real Estate and what we found mirrors our update from last month. Here is a selection of headlines:
Student debt is affecting some buyers ability to buy homes so they are looking to more affordable provinces.
The previous high was 77,000 in 2013. Does this mean the government’s Alberta is calling campaign is working. Probably yes, but I am sure affordable housing has a lot to do with it. Stéfane Marion, chief economist with the National Bank of Canada, said “Alberta is no longer Canada’s best kept secret. What I mean by that is Edmonton and Calgary are the only two cities where home affordability is still better than it was in the 1980s — not the case elsewhere in the country,”
Calgary ranked sixth among major cities globally where affordability increased between 2018 and 2022. They didn’t include 2023 because right now, Calgary seems to be Canada’s hottest Real Estate market. But where is Edmonton you ask? Edmonton holds the number 2 spot for being the most affordable major city in the world. For the advocates of affordable housing, that should come as good news but what it really means is that Edmonton has seen negative appreciation for the last 5 years. And checking the numbers for last 8 years shows zero appreciation (Dec 2014 ave $362k, Dec 2022 ave $362k)
So why has Edmonton Real Estate not increased in value when other cities have? Could it be related to Trudeau’s comments that there is no market for Alberta’s oil and gas despite evidence to the contrary. Those remarks discourage investors and businesses wanting to set up shop but another factor is Edmonton has plenty of land so we get urban sprawl. With lots of land, supply can meet demand so prices have remained steady but is a different trend coming? The City is encouraging developers to convert old office towers into residential units. It has worked successfully in other cities as it densifies the core, brings in more people, supports more businesses, making it more vibrant and dynamic place to live. That is long term thinking regardless of the number of people moving to Edmonton now. Going forward I see Edmonton market has plenty room for improvement. Historically, Edmonton follows the Calgary market with a six to twelve month offset. With so many people moving to Alberta and Edmonton being so affordable, I think it is Edmonton’s time to shine.