Weekly Market Update, Oct. 20/17

Whoever came up with this prediction should be at the end of a rope. From first to worst, dead last right there with St. John's Newfoundland.

Calgary and Edmonton are forecast to be the fastest growing census metropolitan areas (CMAs) in Canada this year, according to The Conference Board of Canada’s Metropolitan Outlook: Autumn 2017.

"If you’re looking to move a luxury property, now would be the time to do it."

you mean, if you still can find a fool lower a bit the price now or you will lower it more later.... too late for many....

Edmonton's economy is growing so quickly, it's starting to turn into a real boom!

The regulatory changes around RE are dizzying, and I have to think at some point it's going to drive people away from RE as an investment category because of the never ending uncertainty around what the next rule change will be.

Do you realize, in the last decade, we have had everything from zero-down 40 year mortgages to our current situation with stress tests on conventional 20%+ down mortgages, and from helocs that could be 95% LTV to today's 70%? Throw in new rental controls, foreign buyers tax, and empty homes taxes in certain jurisdictions and the regulators are starting to look downright bipolar. The worst thing you can do for investor confidence is to change rules mid-stream, and this is likely part of the intent of all of this change: not only to stabilize and protect the banking system from the risks of long term low interest rates on the housing market, but to discourage RE as an investment class, particularly for retail investors.

Anyone who wants to continue to play the game better learn the new rules, because things are changing, and I don't think they're done yet. The bright side is that in spite of a mother of a recession, in spite of being in a province that is now looking to find itself after the last of the oil booms is gone, in spite of rule changes that have progressively made it more difficult to qualify for financing, and in spite of negative net interprovincial migration for years now, Edmonton RE has continued to move pretty much sideways. I think it bodes well for the long-term stability of prices that we haven't seen worse declines already. Once migration stabilizes or turns net positive as is expected within a year's time, I think that we'll see the condo inventory come down and that market stabilize as well. I think banks are going to tighten up on home builders this coming year- it's already happening, so we could potentially see less spec inventory and less overall building activity in 2018, which will support prices as well. I just hope, selfishly, that the end of the regulatory tightening is here now and there's no more changes coming, as I'm not sure how much more the Edmonton market can bear.

I've noticed that there are quite a few more homes on the market at the lower end of the price spectrum (around the $150k mark) in Edmonton than there were last year. That, combined with the fact that they're "giving away" Bentleys with overpriced condos to artificially prop up the prices makes me think that Edmonton property values will be sliding lower in the near future. (Especially if oil & gas prices stay low and interest rates continue to rise.)

It would be interesting to see some stats about average time on the market and price-per-square foot (since changing house sizes would also affect the house/condo prices).

So we had a problem with the blog this week, all comments were being sent to trash. So sorry it took some time to get your comments back, it took awhile to figure out what was going on. We should be good to go now. Thanks for your patience.

Well said!

The high inventory is also a concern.... We post the inventory and price per square foot in our monthly reports... next one comes out in a week. Here is last month's: https://www.livrealestate.ca/blog/2017/10/real-estate-prices-stable-edmonton-september-despite-lower-sales.html

You mean 8.79 to 6.25 % 2000 to 2008 years. is reasonable for the middle income families ? And that's good for new immigrants coming to Edmonton and Alberta who needs starter homes ? Anyway your on the right path on your investment though, the rental market will surely get hot this couple of years at least as it will be harder for others to qualify for a mortgage by the start of 2018.

The RE market is tanking out now. Interest rates offered by banks are at 3.39 % 5 year term fixed closed. Just decided to focus on REO's and bought one 15 % below listing price. I feel the BOC just made housing affordability for the middle income families out of reach all over Canada now just so they can control greedy investors at the GTA and Vancouver area. The worst is just about to start and may take 3 years to settle down.

Great post Trev! Not a single statement that I do not agree with.

Jose, I disagree with your statement regarding putting real-estate out of reach of common middle class families. In a market something is only worth what someone is willing/able to pay for it. Certainly these changes over the next few years will have a very material effect on sales & home prices in the long run making housing MORE affordable for middle-class families.

I personally am more comfortable focusing on principle owed, versus just carrying cost and monthly payments. As a relative young professional "33" I would prefer the ability to pay down my mortgages quicker with low principle amount owing and high interest rates, versus stats quo of the last 10 years of stupid prices and silly low interest rates.

Albeit as a someone who owns a condo in Edmonton I am a bit concerned regarding what lies ahead, but my plan was to hold the property for 10+ years and continue to rent it out so in the long run I am sure everything will be fine.