Edmonton housing outlook: let the good times roll

Like for its neighbour to the south, Calgary, the good times continue to roll for the Edmonton housing market.In Calgary’s case, a strong economy, employment and wage growth and increasing net migration have led to a booming real estate sector over the last few years, including record housing starts for 2014.Edmonton, too, has enjoyed those same characteristics, though perhaps not to the same degree. If Calgary is Canada’s “hottest” real estate market, Edmonton is simmering along just nicely.But, the case in both markets is that remarkable growth isn’t always sustainable. The strong performance in both cities is backing off just a touch, but it's still solid.According to Canada Mortgage and Housing Corp.’s Housing Outlook, total housing starts in Edmonton are projected to total 13,300 units in 2014 – down from 14,689 last year – and then decline to 13,000 in 2015 and 12,300 in 2016.Although demand for new homes is being supported by rising employment, elevated migration and low mortgage rates, the elevated number of units under construction, particularly on the multi-family side, has dampened housing starts in 2014, CMHC says.But while starts in multi-family housing will total 6,900 this year – down from 8,719 in 2013 – before tailing off to 6,600 in 2015 and 6,300 in 2016, a different picture is emerging in single-detached homes. Starts in that category have climbed from 5,970 in 2013 to 6,400 this year, and are forecast to climb again to 6,600 in 2015 before dropping to 6,300 in 2016.“Multi-family housing starts reached their highest level since 1978 in Edmonton in 2013,” Christina Butchart, CMHC’s senior market analyst for Edmonton, told New Home & Condo Guide. “Activity in this market has been supported by an expanding economy, and also by relatively low inventory, particularly of new condominium apartments. The relatively high number of units under construction is a result of high demand for multi-family units, including both condominium apartments and rental apartments, in the Edmonton market.“In 2014, multi-family housing starts have moderated, particularly in the condominium apartment segment. Although multi-family starts will move lower in 2015 and 2016, activity will still be above the preceding 10-year average.”In Edmonton’s resale market, prices have moved up in response to growing demand and relatively low active listings. For 2014, the average resale price is projected to be $360,000, a 4.4-per-cent increase over 2013. In 2015 and 2016, price growth will slow as a result of slower sales growth and an increase in the number of new listings. The average price is expected to grow 3.1 per cent to $371,000 in 2015, and 5.6 per cent to $380,000 in 2016.Related reading3 reasons to love EdmontonIn this Battle of Alberta, Edmonton winsDowntown Edmonton revival: let the games begin!