Edmonton’s Housing Market Predictions for 2018
As we get closer to the end of 2017, those interested in purchasing new homes anxiously wonder what the housing market might hold in 2018. Throughout Canada, there’s a general sense the housing market is starting to level off, but these trends are largely due to changing regulations that affect foreign buyers in Vancouver and Toronto. As a smaller city, Edmonton bucks some of those trends, but you’ll also find our market isn’t quite as volatile.
While we don’t have a crystal ball that makes 100 percent accurate predictions, these are some of our guesses as to how current trends in the country will play out for those looking to buy or sell a home in Edmonton in 2018.
Modest Growth in Home Prices
Home prices in Edmonton are expected to increase just two percent. This falls behind the current Canadian average of around 13 percent, but this slower growth rate is fairly typical of the region. In other provinces, homeowners may be disappointed to see their homes go from double-digit increases to single-digit increases.
If you’re trying to sell your home, you shouldn’t have to worry about losing money in the sale, particularly if you’ve been living in the home for several years. You also don’t need to feel rushed to sell in order to get the best price in a downward trending market. Whether you sell your home now or in a year, you’ll probably get around the same price.
Higher Interest Rates
The Bank of Canada plans on increasing mortgage interest rates. While there’s no way to know exactly when or how much the rates will increase, analysts say to expect a .25 percent interest rate hike by July 2018. This is not a significant increase but will result in slightly higher monthly payments for those who make a purchase after the rates increase. If you’re looking at homes at the high end of your price range, this could make a big difference to you personally.
If you’re concerned about how increases in interest rates could affect your monthly payment, you could get a mortgage pre-approval now. Getting pre-approval typically locks in the current rate for a certain period of time. It’s always a good idea to get pre-approval when you’re almost ready to purchase your home.
Credit Debt Affecting Home Affordability
Though not directly tied to the housing market, it’s important to also take a look at consumer debt rates. Alberta has the highest average debt load. The average non-mortgage debt is over $27,000. When banks determine how much money they’re willing to loan, they factor in payments you have on your credit cards and other loans. Those with high debt qualify for less money than those without extra consumer debt.
This doesn’t apply to you if you keep your debt in check, but if you’re one of the people in Edmonton who has high debt, you’ll be in a better position if you make an effort to pay off your debts before applying for a mortgage.
Continued Interest in New Construction
There continues to be a lot of interest in building new homes. Homebuyers will be happy to know that, even though there’s been increased demand for brand-new homes, the prices of these homes are remaining stagnant and even dipping slightly. Edmonton has a strong new construction market featuring several builders with good reputations. To attract buyers, you might expect to see builders offering special incentives like free upgrades.
However, wise consumers know choosing a home is not about price alone. It’s still important to check the quality of the builder’s work and to compare prices across the different brands.
Preference for Single-Detached Homes
According to the CMHC (Canada Mortage and Housing Corporation) Housing Market Outlook, consumers tend to prefer single-detached homes to duplexes, townhomes, laned homes, and apartments. This is likely due to a decrease in the labour market and migration to the Edmonton area. Those who are interested in these multi-family homes may be able to get better deals as builders try to incentivize these purchases in order to complete developments. This could also lead to increased availability of quick possession homes. These are ideal for those who want a brand-new home but can’t wait for it to be built.
While Edmonton’s housing market isn’t rapidly increasing, a steady market creates favourable conditions for both buyers and sellers. There’s no guarantee our predictions will come true, but it looks like buying a new home in 2018 will be a good decision.