The real estate market in Edmonton, Alberta has witnessed some interesting developments in the first six months of 2016. The city has seen fewer construction starts when it comes to single-family homes than it did for the same period last year. In 2015, there was 17,050 construction starts on single-family houses. The projections for 2016 indicate that the number of starts could be 50% lesser. This downturn has been attributed to decreased consumer confidence, reduced employment growth, and the availability of a large number of resale houses. The slowdown in the oil industry in Alberta has had a direct impact on cities such as Edmonton and Calgary.
Sales have been plummeting
The number of resale houses exchanging hands was also lesser than the figure in 2015. The average price of all homes in Edmonton dropped slightly for six months of the year before picking up and stabilizing after June, despite the continued drop in sales in the city. The number of sales has been decreasing steadily and it isn’t expected to pick up until mid-2017. Homes sales dropped by around 8% last year and the number is estimated to remain constant this year.
Stricter guidelines for buyers/lenders across Canada
The real estate market isn’t expected to crash heavily, but the Canada Mortgage and Housing Corporation has moved to implement stricter lending guidelines to prevent buyers from falling into a spiral of debt. This will either cause people to wait until they have a larger down payment or opt for a cheaper home.
Vacancies on the rise
As a result of reduced sales, the city’s vacancy rate continues to rise and is expected to hit 5% in 2017, up from 1.5% in 2013. The rising cost of rent of two-bedroom apartments is also having an impact on the vacancy rate.
The market continues to be a good market as long as you have the required capital. The greater number of available homes and relatively stable prices will ensure that buyers will not have to overpay. The prices will also drop if sales continue to plummet.