Alberta is known for its oil sands, and it should be: Alberta’s oil sands are the third-largest proven crude oil reserve in the world. But Alberta’s provincial capital, Edmonton, has much to offer, including research, education, and, for first-time home buyers, the chance to score a great deal on a home.
Liv Real Estate REALTOR® Nathan Mol has noticed that with all of the in-migration that the area has had over the past decade, there are plenty of people who were previously renting and now want to get into a house that really meets their lifestyle needs.
“There are some pretty good opportunities I see right now in a lower price point, and areas downtown are seeing pretty strong action . . . and I don’t see that changing, that’s only going to increase,” Mol says. “If we do see any type of rebound in oil prices, it’s only going to accelerate an upward momentum swing. This is one of those few times I think that there are some pretty good deals in the cheaper price points, which usually doesn’t happen.”
Housing affordability in Edmonton eroded slightly in the first quarter according to a recent RBC Affordability Report, almost certainly due to the slump in the oil industry and “downward pressure on household incomes.” Still, experts don’t see it as much of a problem.
“The measure has been stable since 2012 and affordability is unlikely to be a major impediment for homebuyers,” said RBC chief economist Craig Wright. “A recent pick-up in resale activity since the first quarter may be a sign of confidence rebuilding in the market.”
Edmonton is far from the Vancouver housing market, but has felt residual effects from it over the years. One of those is cost; Vancouver is very expensive, and it’s hard for young families to start a family there when they can’t get enough space for their money. That’s not the only reason, Mol says.
“The job market still isn’t as good as it is here,” he says. The City of Edmonton’s chief economist John Rose said that the capital region added roughly 30,000 new jobs the past year, and average weekly earnings jumped 4.7 per cent. Mol adds that Edmonton is quite different from the rest of the province in that it has much more of a balanced economy, “whereas Calgary is very corporate and driven around the exploration of oil. Edmonton is the ‘business-as-usual’ city and is more diversified into transportation, keeping the oil patch going, and so those are not the jobs that they cut. The jobs that tend to get cut when the oil goes down are more of the speculative jobs and the office type of jobs, versus keeping the wheels in motion.”
And that’s exactly what Edmonton is doing. In fact, Mol says that single family homes in Edmonton are bordering on a sellers’ market, with only 3.7 months inventory available. Move-up buyers are targeting these homes in older, more established neighbourhoods, and in these areas in the southwest of the city, the number drops to 2.9 months of inventory available. But in spite of the deals that are available at the lower price points, namely for condominiums, there is a decent amount of inventory that buyers can choose from. Why, then are first-time buyers being so cautious?
Media negatively affecting housing market?
In addition to having less money saved up as other buyers, Mol says that “one of the challenges, honestly, that buyers seem to be facing is just looking at the media and seeing negative articles in the media. That’s really what creates a bit of a sense of fear and that’s where I see the difference between the people who are newer to the province and the people who have been here in previous downturns. They realize that things are really actually chugging along really well.”
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The above article was provided by Which Mortgage Canada, a site specializing in connecting new home buyers with mortgage brokers.