Edmonton Real Estate Forecast: 2015 and Beyond
The Canada Mortgage and Housing Corp. (CMHC) held it’s annual Edmonton Housing Outlook conference yesterday. I find their forecasts are always on the conservative side, so I’m not surprised their opinion is that the real estate market in the Greater Edmonton area will remain robust for the next two years, but not as robust as 2014 has been. Personally, there is still a lot of demand for single family homes in Edmonton, and a lot of frustrated buyers that can’t find what they’re looking for. My forecast for 2015 is certainly better than CMHC’s, especially when it comes to single family homes.
Demand in the Edmonton area is supported by high in-migration, a strong job market, and of course low interest rates, but there are some signals suggesting that although we are likely to be among the best performing markets for the next few years, we should see things slow down a bit. For starters, there are a lot of condos currently under construction, and that has dampened housing starts. Builders should start to scale back production to ensure inventory levels remain manageable for the next few years, particularly in the multi-family segment of the market. They still expect single family home construction to post some gains in 2015.
When it comes to the resale market, they see the Edmonton market remaining quite healthy. As we’ve noted on the blog all year, we’ve seen higher demand and lower supply, causing prices to rise 4.4% in 2014 – the highest growth rate since 2007. CMHC expects these higher prices will lead to more listings coming on the market in 2015, and with economic conditions expected to slow a bit, demand should drop a bit as well. Of course, rising interest rates should slow growth as well. They’re not saying prices are going to drop or anything, just that price growth will slow in the coming years.
The overall average resale price for 2014 is expected to be $360,000, and CMHC projects the average price in 2015 will be $371,000 and $380,000 in 2016.
They are also painting a pretty rosy picture for the rental market in 2015 & 2016; although they expect the vacancy rate to move up just a bit, they still see a tight rental market with rents continuing to rise. There are some new rental apartments starting to hit the market, but demand is expected to continue to grow, albeit at a slower rate.
The October vacancy rate was 1.6% this year and the average 2-bedroom rent was $1,200, they’re expecting it to rise to 1.7% and $1,250 next year and 1.9% and $1,280 in 2016.
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.