Edmonton Real Estate Market Analysis: Fourth Quarter 2023 Market Report

The Edmonton real estate landscape has seen varied dynamics through 2023, with trends signaling both opportunities and challenges for homebuyers and investors alike. Understanding these patterns is crucial for making informed decisions in this vibrant market.

Edmonton New Single-Family Housing Insights

Price Adjustments in the Edmonton Market

The New Housing Price Index (NHPI) for the Edmonton Census Metropolitan Area (CMA) experienced a decline of 3.1% year-over-year in November, indicating a slight cooling in the market. The average selling prices for ground-oriented units also saw a decrease, down by 1.6% from January to November 2022, according to Statistics Canada.

Surge in Edmonton Single-Detached Housing Starts

Contrastingly, November witnessed a 24.7% year-over-year increase in single-detached housing starts in the Edmonton CMA, marking the best November performance since 2014. However, the year-to-date figures up to November show a 22.9% decline compared to the same period in 2022, with starts expected to approach the five-year average by year-end.

Edmonton Multi-Family Housing Developments

Growth in Multi-Dwelling Starts

November saw a nearly threefold increase in multi-dwelling starts compared to the previous year, with all types of multi-dwelling units (semi-detached, row, and apartment) showing growth. Despite this spike, the year-to-date figures indicate a 13% decrease in multi-family starts compared to the first 11 months of 2022, with a noted increase in townhouse construction but weaker activity in apartment and semi-detached sectors.

Economic and Market Indicators

Inflation and CPI Adjustments

Edmonton’s annualized inflation rate was 2.2% in November, showing a slight increase from October’s 1.7% year-over-year rise. The Consumer Price Index has risen on average by 2.9% compared to a significant 6.4% increase during the first 11 months of 2022.

Net Migration and Job Creation Boosts

Alberta saw a significant net migration increase, with a 22.4% rise in the third quarter, largely attributed to international newcomers. Employment in the Greater Edmonton Area also rose by 1,200 positions in November, contributing to a year-over-year increase of 5.7% in jobs.

Edmonton Real Estate Market Opportunities

The data suggests a nuanced market, with price adjustments offering opportunities for buyers, while the surge in housing starts signals a responsive construction sector. Economic indicators like net migration and job creation paint a promising picture for sustained demand in the region.

Strategic Considerations for Buyers and Investors

Prospective buyers and investors should consider these trends when navigating the Edmonton real estate market. The slight dip in single-family home prices, combined with the increase in housing starts, indicates a market adjusting to both demand and economic conditions. Meanwhile, the robust multi-family sector growth underscores the diversifying preferences among Edmonton residents.

The Edmonton real estate market is evolving, with significant implications for buyers, sellers, and investors. By staying informed on these trends, stakeholders can make strategic decisions that align with their goals and capitalize on the opportunities that the Edmonton market presents.

Fourth Quarter Market Report for 2023- REALTORS Association of Edmonton

Edmontons New Home Builders: Market Trends and Housing Supply in 2023

Edmontons new home builders had a challenging year navigating city’s real estate market in 2023. Understanding the key trends affecting housing supply, demand, and inventory and how these factors may impact your next real estate investment or home purchase.

Edmontons New Home Builders – Market Highlights

Housing Starts Decline:

In 2023, Edmonton’s housing starts declined by approximately 10% compared to the previous year. This decrease was particularly noticeable in the single-detached housing segment, which saw an 18% reduction in new projects. The combination of elevated inventories and stringent financing conditions has reduced the number of construction starts.
Rental Market Pressures:

Despite a rise in migration to the region creating high rental demand, fewer purpose-built rental apartment projects began in 2023. This demand-supply imbalance tightened the rental market, leaving many renters vying for limited units. New zoning bylaws effective in January 2024 could change this trend.
Edmontons New Home Builders – Increasing Housing Inventory:

Completed but unsold single-detached and row homes have contributed to a growing inventory in Edmonton. Although the overall stock of completed and unsold units increased by 20% to 2,058 units, inventory levels for apartment units reached a 16-year low due to heightened demand.

1. Impact of Rising Inventory and Borrowing Costs on New Housing Supply

High inventories, primarily composed of single-detached and row homes, have slowed down new construction projects in 2023. Developers have been cautious about starting new projects, preferring to reduce existing inventories before engaging in fresh construction. The high cost of borrowing and challenges in securing funding have exacerbated this situation.

2. Migration and the Tight Rental Market

Edmonton’s relatively affordable housing market has attracted migrants seeking economic opportunities, which has driven up rental demand. Purpose-built rental apartment starts decreased by 14%, further tightening the rental market. Despite increased completions in 2023, strong rental demand has pushed vacancy rates lower and driven average rents higher.

3. Changing Housing Preferences and Construction Trends

Rising borrowing costs have made single-detached homes increasingly unaffordable, causing many potential homeowners to consider condominium apartments. In 2023, condominium apartment starts grew by 11%, highlighting their accessibility. A significant number of these condos are now offered as long-term rentals, catering to a market eager for affordable options.

4. New Zoning Bylaws: The 2024 Outlook

Edmonton’s new zoning bylaws, effective from January 1, 2024, aim to diversify the housing landscape. Allowing three-story townhouses, row houses, duplexes, and small apartments across residential areas, these changes could significantly impact future housing starts.

5. Construction Challenges and Project Timelines For Edmontons New Home Builders

Despite an 18% growth in completions, ongoing construction challenges remain a concern. Labour shortages, rising construction costs, and funding issues have delayed project timelines. In 2023, builders took an average of 9.2 months to complete projects, highlighting difficulties in meeting demand. Apartment projects were particularly affected, with construction times extending to 10.2 months on average.

Moving Forward in Edmonton’s Real Estate Market

While the Edmontons new home builders had challenges due to rising inventories and financing conditions, evolving trends like migration, changing housing preferences, and new zoning regulations could reshape the landscape in the coming years. Understanding these shifts and how they affect the market can empower buyers, sellers, and investors to make informed decisions.

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