Edmonton Shifting to a Sellers Market in 2024

The Edmonton real estate market will favour sellers in 2024 as prices rise and sales activity slumps, according to a new RE/MAX report that looks at the 2024 Canadian housing market.

Over the next year, the average sales price of a home in Edmonton will climb four percent to $416,860, while sales are projected to tumble five percent. Conditions in the West Coast city would transition to a seller’s market after years of residing in a balanced territory.

In 2024, single-family detached residential properties are expected to experience the greatest demand. Moreover, first-time homebuyers could target condominiums that are priced below $200,000. At the same time, they are widely anticipated to participate in a wait-and-see approach before dipping their toes in the Edmonton real estate market.

Another trend that could be prevalent in Edmonton in the upcoming year? Interprovincial migration, says John Carter, the broker and owner of RE/MAX River City.

“Due to the city being one of the most affordable major cities in Canada – with some of the highest overall incomes – we’re seeing strong migration to the region, especially from out-of-province buyers, and it’s keeping property values stable,” Carter said in the RE/MAX 2024 Housing Market Outlook report, adding that immigration from outside of Canada is also playing a role in the Edmonton housing sector.

“The region’s affordability is also attracting immigration from outside of Canada. Historically, newcomers would arrive in Edmonton as a stop on their way to cities like Vancouver or Montreal, but now, they’re coming directly to Edmonton, and they’re staying in Edmonton where they can find themselves a brand-new construction home within two years arriving in the country, which is not something most other markets can claim,” he said.

Looking ahead, the most desirable Edmonton neighbourhoods are expected to be downtown, Rutherford/Heritage Valley, and Terra Losa (close to the West Edmonton Mall).

Current State of the Edmonton Real Estate Market

In November, residential property sales soared nearly 29 percent year-over-year, totalling 1,637 units, according to the Realtors Association of Edmonton (RAE). However, there was a considerable 9.1 percent month-over-month decline in the Greater Edmonton Area.

The average sales price dipped at an annualized pace of 0.4 percent to below $381,000. The MLS Home Price Index (HPI) composite benchmark index rose 1.5 percent from the same time a year ago to $375,000.

But prospective homebuyers have been navigating a tight housing market, with inventories in the Edmonton real estate market plummeting year-over-year and month-over-month. New residential listings slumped close to 15 percent from November 2022.

“In real estate, the rhythm of the market often shifts with the seasons. As we transition into the colder months, it’s not uncommon to witness a predictable decrease in available listings. Yet, what’s remarkable about Edmonton’s current housing landscape is the continual demand despite this seasonal ebb,” said REALTORS® Association of Edmonton 2023 Board Chair Melanie Boles in a statement. “Buyers continue their search for their dream home, eager to secure properties even amidst a tighter inventory.”

Data from the Canada Mortgage and Housing Corporation (CMHC) show that new housing construction activity levels were mixed.

In November, housing starts soared 92 percent year-over-year to 1,349 units. In the first 11 months of 2023, housing starts tumbled 17 percent compared to the same span a year ago, totalling 11,427 units.

The Role of Interest Rates in Edmonton

While interest rates have played a significant role in the Canadian real estate market since the spring of 2022, affordable housing markets have not experienced notable downturns like other areas of the country. In fact, housing valuations have remained stable as homebuyers from major urban centres, like Toronto and Vancouver, have plenty of equity to scoop up cheaper residential properties in Edmonton.

With the financial markets pencilling in the Bank of Canada (BoC) cutting interest rates sometime this year, mortgage rates are likely to come down, too.

After the conventional five-year fixed-rate mortgage reached 6.47 percent in November, reports suggest that lenders are beginning to reduce their mortgage rates to as low as five percent. Investor surveys show that markets anticipate they could come down to around four percent by the year’s end.

Unfortunately, the savings might not be seen in variable-rate mortgages and home equity lines of credit, notes James Laird of Canadian mortgage website Ratehub.

“Bond yields react to future things, whereas variable rate mortgages and home equity lines of credit actually have to wait for the Bank of Canada to lower that overnight [interest] rate, which will cause the prime rate to drop, therefore lowering variable rates and home equity lines of credit,” he recently told CBC News.

Many market experts expect the Bank of Canada to start cutting interest rates in the third quarter.