RE/MAX Housing Outlook 2012 Edmonton

Softer housing values served to stimulate home buying activity in Edmonton in the latter half of the year, resulting in a modest increase in unit sales. Buyer’s market conditions prevailed throughout much of 2011, in large part due to the supply of homes listed for sale.

While inventory is slowly absorbed, the market is not expected to return to stability until mid-2012. First-time buyers were the major drivers in the market this year, sparking demand for single-detached homes priced below $350,000 and townhouse condos between $215,000 and $230,000. Entry-level product, in general, tended to fare better than more expensive homes, despite ideal trade-up opportunities. Sales over the $400,000 price point remained sluggish, with fewer buyers in the market. Investors have reappeared in the Edmonton area, buying up income properties across the board.

Vacancy rates remain low as some renters—future potential purchasers—have placed their home buying plans on hold in anticipation of softer values down the road.

Economic performance in the province remains strong, a trend that is expected to continue in the new year. Alberta will be one of the leaders in GDP growth in Canada in 2012, with an estimated year-end rate approaching 3.9%.
in place.

Edmonton boasts one of the lowest unemployment rates in the country, now hovering at 5.4% (October). Job security is a non-issue, with job fairs popping up with increasing frequency. Sales of big ticket items—including motor vehicles—have provided a glimpse of the confidence returning to the marketplace. Housing starts, down in 2011, are expected to climb again in 2012—settling in at 30,000 units. Net-migration to the province is also on the upswing, expected to climb by 32,000 people in 2012. A provincial election in 2012 should have a positive impact on the economy and the housing market moving forward.

Edmonton remains one of the most affordable large markets in Canada. While both sales and average price are expected to remain stable—on par with 2011 levels—the market is forecast to return to more balanced conditions. A projected increase in pent-up demand, prompted by the threat of higher interest rates, is expected to induce home-buying activity in the latter half of the year. First-time buyers will once again lead the charge, while move-up purchasers slowly enter the market for mid-priced properties. Condominium values should stabilize, providing younger buyers with an opportunity to gain a foothold. Investors should continue to be a force, with condominium townhomes their investment of choice.

As the economy continues to ramp up, so too will residential housing markets in the province. Solid fundamentals are in place.

Edmonton boasts one of the lowest unemployment rates in the country, now hovering at 5.4% (October). Job security is a non-issue, with job fairs popping up with increasing frequency. Sales of big ticket items—including
motor vehicles—have provided a glimpse of the confidence returning to the marketplace. Housing starts, down in 2011, are expected to climb again in 2012—settling in at 30,000 units. Net-migration to the province is also on the upswing, expected to climb by 32,000 people in 2012. A provincial election should have a positive impact on the economy and the housing market moving forward.

Edmonton remains one of the most affordable large markets in Canada. While both sales and average price are expected to remain stable—on par with 2011 levels—the market is forecast to return to more balanced conditions. A projected increase in pent-up demand, prompted by the threat of higher interest rates, is expected to induce home-buying activity in the latter half of the year. First-time buyers will once again lead the charge, while move-up purchasers slowly enter the market for mid-priced properties. Condominium values should stabilize, providing younger buyers with an opportunity to gain a foothold. Investors should continue to be a force, with condominium townhomes their investment of choice.

Edmonton remains one of the most affordable large markets in Canada. While both sales and average price are expected to remain stable—on par with 2011 levels—the market is forecast to return to more balanced conditions. A projected increase in pent-up demand, prompted by the threat of higher interest rates, is expected to induce home buying activity in the latter half of the year. First-time buyers will once again lead the charge, while move-up purchasers slowly enter the market for mid-priced properties. Condominium values should stabilize, providing younger buyers with an opportunity to gain a foothold. Investors should continue to be a force, with condominium townhomes their investment of choice.
 

RE/MAX Recreational Properties

Oil and gas executives with young families, from Calgary & Edmonton, are fuelling demand for recreational properties in Sylvan Lake.

Interest has been strongest for waterfront product at the entry-level price points. Despite some softening in values, affordability is still an issue in the area and buyers continue to compromise. A three bedroom recreational property on a standard waterfront lot now starts at $800,000, while non-waterfront product can be had from $249,000.

Inventory levels are adequate at present, but waterfront opportunities are limited. Twenty recreational listings on the water and 28 listings off the water are currently available for sale. Sylvan Lake continues to be most sought-after, but inland lakes such as Pine, Gull and Buffalo are also gaining in popularity. The most expensive listing sold to date, at $1.25 million, was a waterfront home on Sylvan Lake, offering 100 ft. of shoreline.

Sales of recreational properties in Canmore were off to a slow start due to an extended winter, but the spring thaw is currently underway. Eighty-six recreational properties have sold to date, considerably off last year’s heated pace of 120 units during the same period. An oversupply of new condominium units, built before the recession, has contributed to the lacklustre performance. As these surplus units are sold, the market is expected to stabilize.

Overall demand is on the upswing among all types of buyers, especially those at the lowest and highest price points. Affordability has greatly improved, with a typical, two-bedroom, two bathroom condo townhouse now starting at $229,000. Those on a tighter budget can spend $215,000 for a condo hotel unit or as low as $84,900 for quarter-share fractional ownership. Local and provincial purchasers account for the majority of sales as the rising Canadian dollar has affected U.S. buyers. The most expensive property sold this year was a freestanding home in Silvertip Golf Resort for $2.45 million. Despite softer conditions, the desire to own in Canmore remains strong due to its close proximity to Banff National Park and five world-class ski resorts.

(Source: RE/MAX Western Canada—RE/MAX Recreational Properties June 2011)