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“Edmonton is likely a better market for buyers because it’s less pricey and not quite as hot as Calgary’s,” says Elton Ash, executive vice-president of Re/Max.
While Edmonton is expected to see sales decline slightly and prices to gain modestly, Calgary is forecast to see potentially record sales and among the strongest price growth in the nation.
Overall, the national market is expected to see more balance between buyers and sellers, a change from pandemic markets characterized by record-high buyer demand.
In turn, the national market is expected to grow moderately as buyers adjust to more historically normal interest rates after several years of low borrowing costs.
The Re/Max report forecasts prices nationally will gain about three per cent in 2023 over 2022. While statistics for pricing are still incomplete for 2022, the Canadian Real Estate Association stated the average price in Canada as of Oct. 31 was about $623,000.
Based on that figure, Re/Max’s forecast of three per cent would see the average price nationally reach $641,000 despite sales moderating in most markets.
Edmonton is among those forecast to see declining sales, falling two per cent over 2022.
Still the report notes demand will be historically strong, given the city and surrounding regions saw 23,218 sales by Nov. 30. In turn, activity by year’s end could be on pace to surpass 2021 when 24,652 transactions occurred — an all-time record.
One reason for Edmonton’s continued strong activity is it remains among the more affordable markets, says realtor John Carter, broker/owner of Re/Max River City.
“Edmonton doesn’t have affordability issues like larger cities,” he says. “Here, a much smaller percentage of buyers are up to their eyeballs in debt.”
As a result, buyers can absorb higher mortgage payments while cutting back on consumer spending to acquire the home they want.
“You can still buy a nice family house here for the average price,” he says.
While the Bank of Canada has now increased its overnight rate to 4.25 per cent up from 0.5 per cent in early March this year, higher mortgage rates are more likely to affect buyers in Toronto and Vancouver negatively where average prices exceed $1 million.
By comparison, the Re/Max report notes Edmonton’s average price was about $401,025 as of Oct. 31. The report also forecasts the average price will climb three per cent due to limited supply and relatively robust demand, reaching $413,000 in 2023, based on the Oct. average price.
One notable driver of the market could be luxury even as larger centres are forecast to see slower demand.
“Historically, people built luxury in Edmonton, but a generational shift is occurring where a lot of those older homes are up for sale,” Carter says. “People are buying, ripping them down and building bigger homes, or renovating.”
It’s a trend partly driven by ongoing challenges — including labour and material shortages — limiting the supply of new homes, Carter adds.
Overall, however, Re/Max predicts Edmonton is likely to remain a good market for buyers and sellers in 2023.
“We’re predicting prices to remain fairly stable amid generally balanced conditions between buyers and sellers,” Ash says.
Source: EdmontonJournal
