After three years of unprecedented fluctuations, Edmonton’s real estate market forecast is showing a shift back to normalcy in the second half of 2023.
The real estate market has gone through incredible slumps and spikes that were unique to the COVID-19 pandemic. From a plummet in sales in 2020, to a frenzied increase in sales and prices in 2021 and early 2022, followed by a decline again in the second half 2022. It’s safe to say the real estate industry has been unpredictable.
Buyers and sellers have faced many unique challenges over the last three years. But now the buyers are back, housing prices are stabilizing, and Edmonton’s real estate market is shifting back to a familiar normalcy for both buyers and sellers.
After dropping in price by 6% from last year, Edmonton’s housing prices trend for 2023 is expected to increase by 1.5% this year as the market once again stabilizes to pre-pandemic market norms. This is 0.5% higher than initially predicted. For new homebuyers entering the real estate market, this shift in the market is good news.
There are several factors that have, and continue to, affect the Edmonton housing market.
Lifestyle changes in how and where people work affected the market during the pandemic and continues to influence real estate decisions today. More people are working from home part or full-time, so their housing needs have evolved to meet this new work routine.
Another factor influencing Edmonton’s real estate market forecast is the high number of newcomers and Canadians from other provinces moving to Alberta. A strong economy is attracting people from other countries and regions by the thousands. For example, between January to March this year, 51,000 people moved to Alberta with many making their way to Edmonton.
Edmonton’s population is currently 1.5 million. Over the last decade, the city has seen an average population growth of between 1.5 to 2% annually. This trend is expected to continue to 2035.
Edmonton’s strong economy and a stable energy industry are adding to buyer’s confidence and comfort levels for buying a home in Edmonton. Unlike other provinces that have seen a slower economic recovery, Alberta’s economy is booming.
Supply vs Demand
This year is also seeing significant gaps in supply vs demand. With more people moving to this country and looking for affordable housing than what’s available on the market, Edmonton’s housing prices trend is attracting more homebuyers.
Edmonton has one of the most affordable real estate markets in Canada. The average house price in Edmonton in 2023 is under $500,000.00.
When comparing monthly and annual home prices in Edmonton, monthly comparisons declined for all home types while they increased annually. Single family homes decreased by 3% from last month but increased by 7.1% from the same time last year.
Detached house prices increased by 5.4% from last year and decreased by 1.7% from last month. Semi-detached homes also decreased in price by 1.5% this month but over all, jumped in price annually by 4.3%. Townhouses saw the second lowest annual increase in price of only 3.6% but the highest month-to-month decrease of 4.1%. Condominiums had the lowest year-to-year increase of only 0.5% but the lowest month-to-month decrease in sale price of only 1%.
The lack of rental units in Alberta as well as other major Canadian cities is also driving the real estate market’s three-year benchmark prices. Edmonton is seeing a more modest benchmark increase in housing compared to other major cities, adding to the affordability of the housing market. Where Edmonton’s three-year benchmark increase is 7.7%, other cities have double digit increases of 25% or higher in their three-year benchmark prices.
While these benefits have increased sales in Edmonton, high inflation and high interest rates on mortgages are adding financial stress to homebuyers. New homebuyers are more cautious and conscious when it comes to borrowing loans from financial institutions.
With home prices skyrocketing in other major cities across the country, the average house price in Edmonton in 2023 continues to make home ownership possible in this thriving city. As we move forward, Edmonton’s real estate market is gradually finding its footing and returning to a more stable state. The city’s unique blend of affordability, a strong economy, and population growth makes it an attractive destination for those looking to invest in real estate or find their dream home. Whether you’re a first-time buyer or a seasoned investor, Edmonton’s real estate market offers a promising future.
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