Area markets at low risk for volatility: report
The Edmonton-area housing market is at low risk of big price jumps and other imbalances that may impact both buyers and sellers, says Canada Mortgage and Housing Corporation (CMHC).
The Crown corporation's assessment of the area market, released Wednesday, shows price acceleration, overvaluation and overheating have not been an issue. Overbuilding, meanwhile, is described as moderate because completed and unabsorbed units per 10,000 of population declined below the threshold. The assessment looked at the housing market from September to November.
CMHC senior analyst Christian Arkilley said the assessment provides a snapshot of how stable the area's market is.
“We're looking at the price, we're looking at the inventories, we're looking at supply and demand in the market and then assessing all of that against our metrics,” he said. “We're (also) looking at sales-to-new-listings, how that is moving and we have a threshold for that. We have that at 85 per cent. Anything that falls below that is seen as low (vulnerability).”
Edmonton's overheating, which is when demand outpaces the supply, had a rate of 56.7 per cent, which was 6.9 per cent higher than the previous assessment. CMHC said Edmonton is headed toward a balanced housing market thanks to sales and new listings increasing and inventories decreasing.
Arkilley said there was also a high demand for single-detached homes.
“That actually drove housing prices up,” he said. “Those will have higher pricing compared to, say, condos or apartments. So a lot of the price growth that we saw in Edmonton was also because of the file size. The demand for high-end units was higher compared to condos, apartments units.”
Arkilley said Edmonton's housing prices aren't increasing in a way that's sustainable for the area.
Meanwhile, in a Dec. 4 report by Mortgage Professionals Canada, 97 per cent of Canadian homeowners said they were happy with their decision to purchase a home. The report also highlighted that homeowners were affected less severely than renters since the pandemic started. Non-homeowners were also 23 per cent more likely to purchase a home in the coming year compared to seven per cent prior to the pandemic.
The report surveyed 987 Canadians from Nov. 16 to 26 as part of an ongoing examination of consumer attitudes and expectations about housing and mortgages during the pandemic.