Edmonton Real Estate Market Seems Unsettled
Edmonton has calmly gone through Alberta’s economic meltdown, but there could be choppy days ahead, real estate specialist Don Campbell said.
The capital has benefited from a stable government workforce and such major construction projects as northeast Anthony Henday Drive, Rogers Place and towers in the Ice District, said Campbell, senior analyst at the Real Estate Investment Network.
But much of the building work is finished, and deficit-laden governments won’t take on many new employees this year, which could lead to a softening economy that isn’t good for housing prices, he said.
“I’m already seeing vacancy rates increasing and rents dropping slightly,” said Vancouver-based Campbell, who has provided analysis of Canada’s real estate markets for more than 20 years.
”In residential housing, supply is starting to creep up, which is another indicator that right now sellers haven’t come to the reality that the market is slowing down, so they haven’t dropped prices much (and) buyers are sitting on their hands.”
Graph from Vancouver based real estate specialist Don Campbell shows the economic cycle that leads to higher house prices supplied.
He predicts Edmonton prices remaining flat in 2017. That’s better than the approximately four per cent drop he expects in hard-hit Calgary, but he cautions Edmonton residents shouldn’t start celebrating.
“It will feel more fearful because the slowdown will be on in Calgary. They’re 18 months into it already … This will be year one of that (in Edmonton).”
Campbell, who’s speaking in the city at an event Wednesday, is more optimistic about 2017 than the Realtors Association of Edmonton, which expects single-family home sales and prices to decline while inventories stay high.
The prospects for housing vary elsewhere in Alberta, Campbell said.
Rents and prices have gone down in Grande Prairie and Peace River due to the oil and gas industry downturn, while the situation for forestry towns such as Slave Lake and Whitecourt is uncertain unless Canada reaches a new softwood lumber deal with the U.S.
Fort McMurray, on the other hand, should experience a boom rebuilding from last year’s wildfires.
Oil prices, the impact of the carbon levy and whatever trade measures might be taken by incoming American president Donald Trump are all wild cards.
Campbell looks forward to housing in the $300,000 to $400,000 range will be the most popular in the next few years, partly a result of new federal mortgage rules that have reduced the amount many people can borrow.
He sees the strongest demand for two- or three-bedroom homes in good condition and within 800 meters of an LRT station, but warns that people shouldn’t buy unless they’ll hold their property for at least five years.
“It will be smaller homes and smaller lots, because people want to have lots still, but we are also seeing the condo lifestyle is becoming an OK choice for the next generation.”
