Is it a good time to buy a house in Edmonton?
Predicting what the Edmonton housing market will look like in 2020 isn’t an exact science. Of course, no-one can be 100% accurate in their predictions, and there are always unexpected external factors that can affect the market, but it’s possible to take a look at some of the current trends in the market and make some pretty good predictions about what the next year will hold.
The good news is that the outlook is generally positive, with much of Canada (and especially Edmonton) finding itself catering to one of the most diverse groups of buyers it’s ever seen.
The Market is Stabilizing
As you’re probably aware, the government introduced a new mortgage stress test at the beginning of 2018. While this measure aims to provide more stability in the market in the long-term, in the short-term caused a little disruption as it meant that buyers were qualifying for a smaller mortgage than they originally would have. This, in turn, meant they had to save up a larger down payment to qualify for a mortgage on the home they wanted or had to pivot to looking at a smaller home.
In the next 12 months, we should see this effect return to normal as new buyers enter the market already knowing what to expect, and only improving as the longer-term benefits start to take effect. Sterling Homes can help you choose what fits you best, and we have several models with great specifications that hold superior value obtained through our buying power.
We’re currently in a strong buyer’s market, and we expect this will continue into 2020. There is a lot to choose from right now but rest assured, when you buy a Sterling home you get an excellent home and we will be here to stand behind our product.
If you’ve been thinking about a new home, you’re in luck! This buyer’s market means you’re likely to get a good price when you go to sell your home. In fact, many home builders have been keeping prices steady even when their costs are increasing.
It’s a smart decision to buy before the tide shifts. You’ll also find that there is a good selection of new homes that are move-in ready.
A Younger Population
Along with a strong buyer’s market, Alberta also benefits greatly from a younger working population than the rest of Canada. Over 70% of Alberta’s population is of working age, meaning Alberta has more millennials than baby boomers, and half of those millennials intend to enter the housing market in the next two years. Consumer confidence in these groups is also way up, with 84% of millennials feeling that home ownership is a “very good or good investment.”
Even among the older baby boomers, there’s encouraging news. A poll taken this year reveals that 19% of people aged between 54 and 72 in Alberta are planning to purchase a home in the next five years.
Good Homes Will Sell
In a buyer’s market, you might worry about whether or not you’ll be able to sell your home. Fortunately, good homes are still selling. They might take a slightly longer time to sell than if we were in an especially hot market, but you don’t need to worry that it will never sell.
The key to selling your home is to price it right and remember that buyers can be a bit picky. In a different market, buyers might be willing to overlook your home’s imperfections, but that won’t fly in this market. It’s important to make any repairs and take steps to make your home more attractive. A good real estate agent can set you on the right path.
Slight Price Decreases
Home prices are expected to decline in 2020 but don’t panic! We’ve already talked about this being a buyer’s market, and you’ll be able to capitalize on this when you purchase your home. Unfortunately, it also means that you might need to lower your home price just a little. Luckily, the expected decrease is quite small. Declines through 2018 averaged about 1.7%, and in 2019, they’re only expected to be 1.2%. When we’re talking about homes that are over $100,000, we’re not talking about a lot of money.
Rising Interest Rates
Interest rates throughout Canada have been increasing. Luckily, those who are buying new homes have some additional flexibility with the purchase price. A good builder will look at your budget – factoring in the higher interest rates – and show you ways you can get the things you want in your home at a price you can afford.
Edmonton’s population is growing, which is also a healthy sign. In fact, in 2018 Alberta was the third fastest-growing province in Canada. This is due partly to new Canadians settling in Alberta as the government maintains its immigration target of 300,000 per year, and also due to inter-provincial migration, which has seen a positive upswing for the first time in a couple of years. This is expected to continue into 2019, and the growing population will, in turn, drive new home sales across the province.
Affordable Compared to Other Areas
It’s important to note that it’s good to be an Albertan right now, the markets in Ontario and British Columbia, for instance, are much more volatile. We’re lucky to be in Edmonton!
Get peace of mind and come talk to one of our New Home Advisors about how affordable it can be to buy a new home.