RE/MAX Real Estate Blog

Re/Max has release their annual ‘Housing Market Outlook Report’ forecasting what 2015 has in store for Canadian markets, as well as the after-effects from the past year.

All regions of the nation are presently showing gains in price, and many showed increases in all categories of inventory. Edmonton and Calgary, alongside Toronto and Vancouver, have been highlighted as major areas of growth. Expectations based on current trends are for housing prices to either plateau or rise moderately, with no expectations of any decreases on the horizon.

Factors to be accounted for in 2015 include a projected GDP rise of 2.5%, as predicted by the Bank of Canada, along with minor increases in employment rates and wages, as well as a nationwide population increase of between 260-285,000 new permanent residents. These economic elements are all expected to have a positive impact on upcoming real estate trends.

Economic factors to consider in 2015. Credit: Remax Outlook Report

We can see these major trends echoed in the Edmonton market specifically, as well as the contribution of it’s own unique factors, such as an increase in westward migration. The report estimates around 30,000 new residents have settled into Edmonton’s census metropolitan area in the past year, increasing housing demands by about 10%. This pressure on supply has caused buyers to consider higher price points, and caused exponential growth in the condominium market.

Along with condo sales and development, the other burgeoning Edmonton market not to be ignored is the luxury homes category, which saw sales records broken each year for the past three years. According to the document,

“the Realtors Association of Edmonton reported a 29 per cent increase in sales over $1 million compared to last year.”

The popularity of homes over $1 million are the trend to be watching in the new year. There is also an expectation for headway on mixed-use community developments with “residential, retail and commercial components” which will be considered priority for the new, younger demographic of citizens as the provinces average age continues to decrease. Sale prices in the city are predicted to steadily climb, about 4 %, with similar levels of inventory expected to be maintained.

CLICK HERE to view properties available for sale in your area. The extensive 38 page report can be viewed HERE in its entirety as a PDF.

A multitude of media outlets, including the Edmonton Sun and the CBC, are reporting on the correlation between the economical after-effects of the recent plummet in Alberta oil prices and the unseasonably strong Canadian housing market.

As the economic flagship of Alberta there is justifiable public concern over oil-based market fluctuations and especially its influence over the real estate market in the province, which has remained seemingly immune to economic downturn conditions.

YEG housing prices have been resistant to economic decline.

However, reports are unanimously reassuring about the fate of the housing market. Realtors Association of Edmonton President Greg Steele explains that this is related to the somewhat autonomous nature of the market resulting from the recent boom.

“We’ve got away from being solely dependent on oil in the Edmonton market, with $5 1/2 billion in infrastructure/construction projects going along in the downtown core alone. That’ll be sustained for the next three to five years.”

CBC reports that average selling prices are excepted to increase about 4% in the new year, climbing to around $389,000. Due to a strong economy overall and high rates of employment, it may well be possible to remain resilient in the face of an oil crisis.  Crude oil is reportedly being sold at just under $60 US per barrel, nearly a $50 drop since summer prices.

Even with the recent influx of building projects, especially condominiums in the downtown core, and peripheral subdivisions, there is no reason the fear oversupply as some analyses have suggested. The Edmonton market especially is less than saturated, according to Steele, and there is a high demand for homes as the city’s population continues to skyrocket.

“Right now we’re taking everything,” says Steele. “We’re like a sponge. Everything being built is being sold.”

The imbalance between supply and demand will work in favour of the market, keeping it hardy in the face of economic impact.

A further contributing factor to market strength has been the sudden increase in demand for luxury homes. In the Edmonton area sales with a price tag of over $1 million have increase an astronomical 29% in year-over-year comparisons. Since 2011 homes at all price points have been steadily increasingly from an average $325, 395 that year to a current $374,000.

Click Here to invest in an available Edmonton property!

As we reach the final month of 2014, analyses and predictions are flooding in as to what we can expect from the future of the housing market. 2014 saw the highest resale price growth rate since 2007 with an expected average of $360,000, according to the Canadian Mortgage and Housing Commission (CMHC). These rates show a 4.4% increase in year over year sales figures, and while the Edmonton housing market has no shortage of momentum, rapid growth rates are expected to level out for 2015 and well into 2016.

The CMHC reported their fall 2014 market outlook at a conference on Tuesday.

The Edmonton Journal published a report Tuesday on the CMHC’s Edmonton Housing Market Outlook Conference. The article cites average resale prices at $371,000 and $380,000 for 2015 and 2016 respectively. Christina Butchart, CMHC senior market analyst for Edmonton addressed the this trend in moderation of prices.

“Right now, demand for resale homes in Edmonton is quite strong. Over the next couple of years, we expect that economic conditions are going to slow a little bit and that’s going to lead to continued growth, but at a bit slower pace in the resale market.”

As with all aspects of commerce, Edmonton home prices in the recent past have been driven by supply and demand. There have been fewer houses listed than the market demanded, leading to escalating home prices. Due to this apparent sellers market, many consumers have been motivated to list their homes causing an inevitable market saturation. The now larger numbers of properties available will force homes prices down by 2015 causing a ‘moderation’ of prices.

It should be emphasized however,  this slowing growth trend is not to be taken as a sign of a weakening market. “The resale market is going to remain fairly balanced over the next couple of years as we see demand still being supported by our key components of employment and rising wages,” assures Butchart.

The CMHC has made their detailed market outlook publicly available for download. CLICK HERE to search for properties currently available in your area of choosing.