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Edmonton housing market to remain balanced in 2021, prices to increase 2%
Edmonton real estate is likely to continue as a balanced market in 2021, with demand being segmented. Buyers are looking for single-family homes and yards, which includes duplex and row-style townhomes. The average sales price in Edmonton increased by 1% to $364,820 in 2020 (Jan. 1 – Oct. 31), compared to $361,152 in 2019 (Jan. 1 – Dec. 31). The RE/MAX Outlook for Edmonton real estate in 2021 is an increase of 2% in average price to approximately $372,116.40.
Who’s Driving Demand for Edmonton Real Estate?
Move-up buyers are currently driving demand in the Edmonton real estate market, which is expected to continue into 2021. The most popular property type among move-up buyers in Edmonton are single-detached homes and townhouses.
First-time homebuyers in Edmonton are typically single homebuyers. These buyers are not looking at one property type specifically and are buying across all property types. The average price spent on a property by a first-time homebuyer is approximately $300,000.It is expected to be more difficult to enter the market as a first-time homebuyer in 2021, as there is expected to be less inventory, making it tough for buyers to find the right property.
Move-up buyers in the Edmonton housing market are typically young couples. There has been very little hesitation in move-up buyers when it comes to entering the market, as many are trying to take advantage of the low interest rates and low property values. Move-up buyers in Edmonton have changed the criteria on what they look for in a home due to COVID-19. Many move-up buyers are looking for yards, more space, separate offices and finished basements.
The condominium market in Edmonton is most popular with single homebuyers and young couples. The average price for a condo in Edmonton is $222,181. Apartment-style condos are currently in oversupply, which means prices are likely to drop. Currently in Edmonton, many examples of large assessments have been seen, mostly due to insurance costs escalating dramatically for condo corporations, which has resulted in higher condo-fees.
Edmonton’s luxury market is currently driven by move-up buyers with the average starting price for a luxury home in Edmonton being $1,000,000. At this price point, many buyers are getting great value, with the majority of the homes being newer infill or older beautifully renovated homes with large yards in mature areas, or huge lots, often with ravine or private nature backing, in new development areas.
Edmonton’s Hottest Neighbourhoods
Edmonton’s top-selling neighbourhoods in 2020 were Anthony Henday Zone (West), North Central Zone and Southwest Zone. These neighbourhoods are expected to continue as the most popular neighbourhoods moving into 2021.
Edmonton New-Home Construction
Edmonton’s new-home construction sales are strong for single-family in both the suburbs and infill. Apartment condos are in oversupply. Most buyers are looking for a new or “like new” home across all price ranges. Based on the current demand, single-family, duplex/rowhouse and townhomes with yards are a little undersupplied. One new-home construction trend that has emerged throughout 2020 has been the need for home office space options, which is directly related to COVID-19.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
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Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”
- Has Edmonton’s real estate market bounced back despite the COVID crisis?
- What do leading indicators suggest about Edmonton’s housing market?
- How confident are Canadians in the housing market?
- Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey
The Edmonton housing market experienced a drop in sales activity at the peak of COVID-19 lockdowns in April and May, but June saw activity 14% above the levels experienced in 2019. Transactions are also back to pre-COVID-19 levels and the region continues to see multiple offer situations, with sellers’ market-like activity in various neighbourhoods and property types. Edmonton’s housing market is expected to have a strong fall, with September and October anticipated to have higher than historical sales levels.
Acreage living is seeing an uptick in buyer interest as more Edmonton residents are now looking for more space in their properties. In fact, the age demographic for acreage living is getting younger. A 1% increase in average residential sales price is expected in Edmonton, Alberta for the remainder of the year.
Edmonton’s Housing Market Bounced Back To Pre-COVID Levels
While COVID-19 lockdowns in March and April slowed down the housing market in Western Canada, transactions in Kelowna, Saskatoon and Vancouver resumed by May, with sales in both May and June surpassing year-over-year levels. Many buyers put their plans on hold at the peak of COVID-19 lockdowns, but they returned to the market quickly to make up for lost time. Edmonton’s housing market quickly bounced back to pre-COVID levels in June, while Saskatoon experienced its busiest June in years; this momentum is anticipated to continue into the fall market, with RE/MAX brokers and agents estimating a three-per-cent increase in average residential sale prices for the remainder of the year. Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey, and RE/MAX brokers are estimating steady activity to round out 2020.
Indicators Point To A Strong Housing Market In Western Canada
Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.
The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.
Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
Canadians Equally Split On Their Confidence In The Housing Market
Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell.
“While COVID-19 lockdowns slowed Canada’s housing market at the start of a typically busy spring market, activity bounced back by early summer in many regions, including Vancouver and Toronto,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained, and current market activity further exemplifies this. Many homebuyers are now exploring different neighbourhoods that better suit their new lifestyles, and real estate agents are getting busier and working more with buyers from different major cities. According to our brokers and agents across the RE/MAX network, Canada’s fall market is expected to see spring market-like activity.”
Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:
- 48% of Canadians would like to live closer to green spaces
- 48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
- 33% of Canadians would like more square footage in their home and have realized they need more space
- 44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)
About the 2020 RE/MAX Fall Market Outlook Report
The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments.
The Edmonton housing market will lean toward buyers in 2020 with the average residential sale price expected to drop by one per cent. This is due to average values declining, at least until the oversupply of inventory is absorbed. However, some areas and product types are seeing a five percent increase.
Some of the most popular property types in Edmonton include two-story detached homes, luxury properties, infill and “skinny homes”. It is expected that the city’s economy will improve when the government stimulates job creation and when a federal housing policy is implemented that will benefit all Canadian home buyers.
Many new and larger developments in the downtown, Oliver and Strathcona neighborhoods, many of which are integrated with expanding the LRT network, are expected to impact the market in 2020.
Strathcona and Glenora will continue to be very popular neighborhoods based on the amount of infill and new construction projects that are bringing a variety of pricing and housing options to buyers. Ritchie and Bonnie Doon will also continue to see high demand as the LRT network opens, giving more transit and lifestyle options to those in Bonnie Doon.
First-time and foreign buyers are expected to drive demand in 2020. Foreign buyers who previously flocked to Vancouver are now looking at Edmonton for growth in the coming years.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price.
As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by RE/MAX found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.
Click to read the full RE/MAX 2020 Housing Market Outlook Report.
Learn more about RE/MAX real estate franchise opportunities in Ontario-Atlantic Region and Western Canada.
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