YEG Housing Market Avoids Oil Fallout
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.
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Tags: Alberta Oil, Economy, Market, Oil, Oil Skid
