2015 Spring Market Trends Report for Alberta

2015 Spring Market Trends Report for Alberta by RE/MAX of Western Canada

Edmonton

Up 2% – Average Residential Sale Price: $368,002

Edmonton’s average residential sale price proved resilient despite the drop in oil prices that led to a slower spring market in Edmonton. Layoffs and job uncertainty in the oil industry, as well as potential cuts to the provincial budget, have made potential buyers cautious as they wait for signs of stability. Inventory has increased and sales have decreased as Albertans wait to see how the overall economy is impacted over the next few months.

– Condominiums remain a popular housing type, particularly for younger first-time buyers
– The upper-end market has remained resilient
– Sales in the first quarter of the year have decreased approximately 15 per cent compared to the same period in 2014
– Inventory is up approximately 26 per cent year-over-year, creating buyer’s market conditions

Future Trends

– The downturn in the oil industry is expected to slow interprovincial migration, bringing fewer people from Eastern Canada to the city for jobs
– Over $5 billion in construction in downtown Edmonton is expected to continue to provide ample employment
– The Royal Alberta Museum, a $360 million project, is expected to reach completion in 2016. Two other significant projects in the region are the Delta Hotel and the Stantec Building – both mixed-use developments
– Provincial budget cuts could lead to job loss for government employees in Edmonton
– The RE/MAX 2015 average residential sales price expectation for Edmonton has been revised from a 4 per cent increase to no increase

Condo Market

Edmonton’s condo market continues to attract younger first-time buyers, who are drawn to a downtown lifestyle and affordable entry point into the market. Over ten high-rise condo buildings are currently under construction in downtown Edmonton.

First-Time Buyers

First-time buyers continue to be the primary drivers of Edmonton’s housing market, and starter homes in the $250,000 to $400,000 range are quick to sell. These buyers are increasingly attracted to a more urban lifestyle, choosing location and amenities above yards and square footage.

Upper-End Market

The upper-end of the market has been resilient, with those properties priced at over $1 million still selling very well. Sales between $500,000 and $1 million have been hit harder by the recent downturn, and there is considerable inventory on the market in that price range.

Calgary

Down 2% – Average Residential Sale Price $474,251

Despite oil price volatility, house prices in Calgary have been resilient, only depreciating modestly in the first quarter compared to the first quarter of last year. However, market activity has decreased and inventory levels are higher than last year. Lower sales activity is more reflected in houses priced above $500,000, although properties in the right location are still in demand. Sales of houses priced below $500,000 and entry-level condominiums are active as low interest rates continue to attract buyers.

– Low interest rates have mitigated some of the effects of oil price volatility
– Inventory is high in the region creating buyer’s market conditions; however, the rate at which it had been climbing has slowed considerably
– Average days on market has increased from 28 to 39 days
– Potential buyer pipeline is healthy as the average open house is attracting 10 to 30 visitors, although many buyers are waiting for the market to stabilize before making their purchase
– Properties priced appropriately in good neighbourhoods can attract multiple offers

Future Trends

– Sales are expected to increase as Albertans sense that oil prices have stabilized and are showing signs of recovery
– New construction starts have decreased, which is expected to help stabilize inventory levels
– The RE/MAX 2015 average residential sale price expectation for Calgary has been revised from a 3 per cent increase to a 2 per cent decrease

Condo Market

Entry-level condominiums continue to attract buyers, while sales of more expensive units have decreased. However, overall condominium inventory has increased significantly.

First-Time Buyers

First-time buyers continue to purchase property in the region; although, many are waiting on the sideline for the economy to stabilize. Mortgage brokers have noticed a lot more interest in buyers wanting to be pre-qualified for mortgages as buyers are eager to take advantage of the low interest rates once they regain confidence that the market is stable.

Upper-End Market

The upper-end market has been affected by oil price volatility. Sales in properties over $600,000 has slowed, and higher-end homes in the inner core have witnessed a slowdown.

 


 

 

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