Future looking bright for city’s housing market

Increased confidence in economy behind rise in sales, new report says

Sales of new Edmonton condominiums and townhouses dropped 28 per cent in the first quarter of 2018 from the previous three months, but the future looks positive, a new report says.

Major factors in the decline included bad weather and tighter mortgage rules, according to figures released Tuesday by research firm Urban Analytics.

However, sales were up 16 per cent from the same period last year, a sign of increased confidence in the housing market and Edmonton’s economy, the company said.

“Reduced buying power that resulted from the new mortgage rules kept many price-sensitive buyers away from the market in the first few months of the year as they adjust to more limited buying power,” senior market analyst Annalise Boytinck said in a news release. “We anticipate more activity from these buyers in the spring, which will lead to stronger (second quarter) sales.”

One sign of optimism for the multi-family housing market is the reduction in inventory.

Only 621 completed and unsold units were available in the city in the first three months of the year, down 39 per cent from the same time last year.

While list prices saw little change, developers are offering incentives such as waiving condo fees and providing upgrades, the company says.

Meanwhile, Edmonton’s growing economy and the demolition of outdated buildings contributed to a stronger-than-expected office leasing market in the first three months of 2018, a report by Avison Young real estate indicates.

The city’s office vacancy rate dropped to 15 per cent in the first quarter of the year from 15.7 per cent in the previous three months, the lowest level in about two years.

The company expects vacancy rates will continue falling to almost 13 per cent by the end of the year, then rise to around 15 per cent as the Stantec Tower fully opens, and stay at that level until at least 2021.

Although stable, these figures are several percentage points higher than anything seen in Edmonton before the recession started, dating back to 2010.

However, the office market has outperformed expectations so far this year.

The booming southwest Windermere area had Edmonton’s lowest vacancy rate at 5.4 per cent, while Sherwood Park’s 27.4 per cent rate remained the highest in the region.