Edmonton and Calgary have been making national headlines because of the economic downturn in Alberta, but not all the news has been bad news. In fact, real estate in Edmonton especially has had plenty of good news, especially when compared to Canada’s most overheated and volatile markets: Toronto and Vancouver. This month, the CMHC has released detailed assessments of each of Canada’s fifteen most substantial real estate markets. Here’s what they said about Edmonton, Calgary, and other important markets, and what that means for people buying and selling property in Alberta.
At the centre of Edmonton’s real estate market was a warning about pricing overall, but not in the way many consumers would expect. Instead of warning of falling prices that sink well below value, Edmonton may be heading the wrong direction, despite the current economic climate. In their report, the CHMC stated, “We detect moderate evidence of problematic conditions in Edmonton’s housing market. Factors such as overheating and price acceleration continue to show weak evidence of problematic conditions.” In short, it seems that Edmonton’s pricing is still at healthy levels currently, in terms of growth, but that this could cause some issues down the line.
In Alberta’s other significant real estate market, Calgary, the problem is poised to be much worse. While Edmonton was quick to stop building new developments, or at least put some of the major developments on hold while Ice District continues to dominate headlines, Calgary does not have their own Ice District, but they still have plenty of open projects. The CMHC detected “strong evidence of problematic conditions, due to a combination of moderate evidence of overvaluation and overbuilding. A deterioration of economic fundamentals have contributed to moderate evidence of overvaluation.” Essentially, homes are being overvalued and not seriously considering the supply versus the demand for housing in the area.
Compared to Canada’s biggest markets, Toronto and Vancouver, Alberta’s biggest cities are actually fairing quite well. According to The Globe & Mail, Toronto shows “strong evidence” of overvaluation, “moderate evidence” of price acceleration, and “weak evidence” of overheating. And “while we do not detect overbuilding, we have some concerns about the high inventory of completed and unsold condominium apartments.” Vancouver, similarly, has problems with overvaluation. In the report the CMHC says that “home prices are above the level supported by economic and demographic fundamentals. The remaining indicators assessed continue to suggest weak evidence of problematic conditions.”
Overall, Edmonton’s housing pricing is actually fairing a lot better than many cities across the country, including Toronto, Vancouver, and even Calgary. With fewer projects being built and more homes getting decent prices, the Edmonton housing crisis may not be as strong as many detractors would like to think.