In a country where people are being squeezed out of the home ownership market every day in most larger centers of the country…except Edmonton, why is this?
Well, short answer to that question….Calgary has been the favoured child for the last couple years in the province. Buyers (and renters too!) have been and will continue to flock to Alberta in hopes of a better standard of living - not just affordable housing…but certainly that’s a GOOD start.
But now Calgary is hitting its limits with low inventory versus increased number of buyers. Not uncommon for a property to be in multiples - like 10-15 offers and go over list by as much as 30% in some cases. Unreal but absolutely true.
So why is Edmonton not experiencing such activity? Well, the storm IS coming our way…. Alberta is widely known for its boom and bust cycles. We’ve had a few over the years…2005-2008 and 2014-2016 largely reflects the energy markets thus far. Sadly our poor Edmonton condo market has not quite recovered from the boom of 2005-2007.
In Edmonton, we just can’t quite seem to KEEP people here - at least in the past. So our product perhaps cycles a bit more in the system than other markets. Downtown is largely a rental market. It always has been. Historically downtown Edmonton has never been a place where people necessarily want to hang out - for a myriad of reasons muchless spend big dollars on buying a condo. For example we have 50% occupancy in Stantec Tower ( a beautiful tower BTW ) with most of that building being offered for rent as sales have dried up over time. It’s an investment, which at present, most do not want to risk. The risk is not necessarily in losing money - but the length of time it might take to SELL that unit. This alas is the untold story of these units that most Realtors know only too well.
It can literally take years, several price reductions, and several Realtors, to get just about any downtown condo sold. Some, in fact, have NEVER sold on the system since their first offering. I have followed this market now for 22 plus years and when I pull the history of some of these units - nothing surprises me anymore. This problem has just perpetuated over time. Even last year, in 2023, when all other numbers went up - SFH, Attached, Duplex, Row Housing ….but oh no not those poor apartment style condos, their average sale price went down yet again.
This market may be most affected by the boom and bust cycles …easy entry in but alas not necessarily an easy or quick exit to sell. Also - the white elephant the room is the skyrocketing prices of condo fees that have given buyers yet another reason to say no to these units. Not uncommon to see $850 condo fees with a $150,000 unit (Those condo fees largely include heat,water and power).
Don’t get me wrong - I do see VALUE in Edmonton’s downtown - Oliver area is quickly becoming the rising star as young and old seek this area out for its community flare and walkability scores. Perhaps this trend could reach into the city’s core… As a side note, if our downtown streets had as many security and police officers as our downtown pedway system we’d be in a much different position to ‘sell’ the downtown more successfully. That is save for another post….
Will this trend last, given the affordability crisis in this country? Not sure. If we can manage to keep people here (Edmonton), reverse the trend of boom and bust cycles we may have a chance to be the next favoured child in this province and or country! ~ jennifer