Canadian business magazine polled 1000 thousand Canadians on September 1, asking their opinions about the housing market. I’m interested to see if our reader’s opinions are similar or different from the Canadian result. Here are two of the questions – please give us your feedback and we’ll post the results in a couple of days:
Here is what Canadian’s had to say:
Canadian Business Magazine
Of course, they used the Toronto and Vancouver markets to represent the entire country, which we know is flawed, so I didn’t inclue the third question in our poll.
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.
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I bought a 1500 2 story presale in Spruce Grove for 300ish in attractive area close to main thorough fairs.Thought the price was good. Prices have fluctuated 10 percent up or down or so over the last few years. I think Edmonton will be pretty flat the next couple years with the new mortgage rules, However with my rental I have seen an increaase in calls for this time of year, seems like alot of people are still moving to Edmonton.
Please clarify what does “peak” mean, does it have a time frame associated?
The previous peak happened in 2007. If a reader selects “Yes”, does that mean:
1) It has peaked because 2012 price level is lower than 2007?
2) 2013 price is going to be no higher than 2012?
3) Future price, till the end of the universe, is going to be no higher than 2012?
Strictly reading the words, the question “Have home prices peaked in Edmonton” is implying (3). But that’s seems to be too naive of a question, in that the housing price is destined to be higher in the future decades or centuries due to inflation. So, I guess that’s not what you really meant. In that case, please state a time frame.
I copied the wording from the original survey, so I guess it is up for interpretation. In my mind it means has it peaked for the next two years, since the second question is about the next two years. Most people are probably not going to consider the question in such detail and just answer based on whether they think prices are rising or falling.
“Will there be a housing price decline of 10% or more in Edmonton in the next to[sic] years?”
I put yes, but with the assumption that interest rates will rise during this period of time. House prices (and, indeed, prices of anything commonly purchase using debt) move inversely to credit availability and the costs associated with getting that credit.
If interest rates stay at the current (extremely low) levels over the next two years, I don’t see much of a reason for prices to change. However, if interest rates were to rise, back to average levels (average defined by the average interest rates in the last 50 years) where mortgages are ~6%, I doubt many people would debate that it would influence the prices of residential real estate everywhere. In fact, if that were to happen, and there weren’t some other significant mitigating factors that would cause Alberta to boom (e.g. Natural Gas prices, Oil prices both go up while the Canadian dollar drops) then I think ~6% mortgages would cause RE prices in Alberta to drop over 20%.
Very interesting, you predict the housing price will drop 20% when the interest rate goes up to a historic average of 6%. Do you realize that the history average of YoY growth in house price is 7%. You would expect the interest rate alone goes back to the norm, while the price doesn’t?
As with most media in Canada this is very Toronto and Vancouver centric. Their markets only blipped during the GFC and have since of course set new record highs recently.
Edmonton of course peaked in 07 and has not returned to that number since, and that is before inflation is considered. It is really a mistake to use 07 as a benchmark in my opinion as the market at the time was in a mania. I knew people without jobs getting shady mortagaes to try and flip condos….but then again I guess we have to use it because that is what some people paid.
So in light of the comment from Sarah, I would say prices did indeed peak in 07, so yes they have peaked, and will not reach the 07 price point again for more than two years.
Edmonton prices will be flat with no capital apreciation to speak of. Debt rates are way too high, there is too much speculation and wages are not even keeping up with inflation for most folks. I know more than a few people with properties for sale finding no success as they are all way over priced, but the mantra “I know what my house is worth and I will not accept less!”…or “our economy is about to boom again…everyone wants to live here” is repeated over and over as it has since 07.
If you are waiting for capital appreciation on Real Estate in Edmonton you better be very, very patient.
You repeat your mantra with such certainty. I think you’re wrong. I meet a lot of people moving here for trade jobs that start right when they get to Edmonton, or up north, and they are planning to bring more people with them. The promise of better paying jobs in the West will bring a steady stream of ready buyers.
Have you been to the bars in Edmonton and seen how many young(and old) people have expendable dough here? It is ridiculous. There are job postings everywhere in town also. If someone wants to come here and make some good money to buy a house or spend it radically, they can. And I believe they are going to, in droves.
Edmonton is also a great place to live, where you can buy a home for less than you would in Toronto and have quite a tax advantage over other provinces while you save money, and fall in love with Edmonton.
That is all.
As the owner of two properties, one bought in 2007, the next in 2008, I’m in agreement. I could sell neither for close to what I paid.
Thankfully the Edmonton economy and rental market is good or I’d be in serious trouble if I had to sell tomorrow.
My timeline is years (maybe FIVE more), not next year… if I ever plan to break even….
Lets not go through all the same old arguments.
Make your call and leave it at that. Prices higher, lower or the same in September 2014 in Edmonton?
I wish these magazine people knew how to spell. On the second question they spelled “two” as in two years “to”. Just a pet peeve of mine. Grammer and spelling have really gone out the window.
Inspector,
Average selling price for all types or average selling price for houses? Plus you should do it for the year of 2014. More accurate. Either way, i would bet money they will be higher.
Alberta GDP up, Job growth,rental demand, housing demand leading to inflated prices in the next few years.
NO. We can’t crash until we spike higher… and there just isn’t enough complacency in the home market to spark wide spread panic yet… YET. It is coming though…
Long time no post. I sold my home in the SW last month. We Purchased it in 2008 for $320k. It sold for $310k. After closing costs/Realtor fees, we ended up with around $297k. I actually expected home prices to be lower so I was pleasantly surprised with the price. I still predict prices will fall or be stagnant for many years to come. For the first time in a decade we are lowly renters
. To each their own. Edmonton is a fantastic place to live and I hope to purchase a discounted home in Riverbend someday.
Compare net purchase price to net purchase price only, please. In that case, it’s $320k vs. $310k. Virtually flat, or even went up a tiny little bit, considering the house itself is older and more used. A used car would drop value faster than that, even if new car MSRP stays flat.
Realtor fee should not be considered in market trends. Even in 2006, where the market went up and up and up, you could still lose your Realtor fee if you decide to sell just one day after a purchase.
Year on year total home sales change and months of inventory provides early warning on prices for Canadian cities in August:
Vancouver -31% 10.7 MOI
Quebec -26% 12 MOI
Victoria -17% 10.9 MOI
Ottawa -14% (Total inventory not provided)
Hamilton-Burlington -13% 3.2 MOI
Edmonton -11% 5.2 MOI
Montreal -7% 10.8 MOI
Kitchener-Waterloo -4% (Total inventory not provided)
Calgary +16% 6.3 MOI
Months of Inventory (MOI) over 6.5 is considered depressive on prices. Will prices decline? No real telling, I’m afraid, but MOI is generally a reliable belweather.
Your stats say that Calgary is going to do well.
there’s always a blow off top before we crash… look at Van last year..big spike, everyone gets complacent, now death on wheels.. TO same thing this year… now the start… If we get the soft landing the gov’t wants, we get Japan… 20 year housing slump… eventually housing will find its mean…
They are mute questions. There is no absolute Canadian market. Some area will do well most areas won’t . Depends on the economics of the area. Alberta’s only good as long as the oil flows.
Crazyfasteddy shows Calgary’s months-of-inventory at 6.3, but I don’t think it’s accurate. Today’s CREB stats show 3670 active listings with 1121 sales in the past 30 days, which equals 3.3 MOI.
stats say for YOY to August
“stats say for YOY to August”
YOY has no bearing on MOI
Months of inventory is determined by today’s active listings divided by sales in the past 30 days.
GM, I agree those stats show Calgary is doing very well.
For those buying and selling your primary residence like a stock, I think you’re playing with fire. My guess is that you will get burnt. Probably wait for a crash and prices will keep going up and you’ll say to yourself “Why did I sell? Should of just been happy where i was”
These questions were poorly written. While the inflation-adjusted house prices peaked in 2007 (and will most likely never get that high again in inflation-adjusted dollars), the absolute prices will eventually rise higher due to inflation.
New home prices will fall older house prices will rise. No where else in the entire country of Canada is there such a disparity between new and old home prices than in Edmonton. Condos and apartments can’t fall because they already fell about 50 percent from the 2007 highs and never recovered one iota.