Edmonton condo market expected to heat up in 2018

  Downtown condominiums, such as this sales unit to be included in the Stantec Tower's Sky Residences, are expected to be a popular part of the Edmonton market in 2018.

Downtown condominiums, such as this sales unit to be included in the Stantec Tower's Sky Residences, are expected to be a popular part of the Edmonton market in 2018.

Neighbourhoods in central Edmonton and the booming southwest are expected to be among the city’s hottest condominium markets in 2018, a real estate analyst says.

“With Alberta’s economy looking very positive for next year — Alberta looks to lead all the provinces for real GDP (gross domestic product) growth — we’re looking for a really positive year in the multi-family market,” Annalise Boytinck of Urban Analytics said Wednesday.

Rogers Place and the surrounding Ice District are spurring continued revitalization downtown, where 86 per cent of all Edmonton’s high-rise condo sales happened in 2017, Boytinck said.

Established professionals, investors and people who want to downsize are being drawn to the higher-priced housing downtown because they like living within walking distance of a planned grocery store, movie theatre, restaurants and other amenities, she said.

Although Toronto’s Lamb Development Corp. last month cancelled its long-intended Jasper House Condominiums on the Park north of Jasper Avenue on 106 Street, she thinks another project, possibly rental suites, will be built at the site.

Other new condo hot spots in the coming year are likely to include Old Strathcona (with its proximity to downtown and the University of Alberta), Oliver and the southwest.

“The southwest has just been a very strong area … It’s just attracting a ton of people because it’s very affordable. There’s a lot of options to choose from down there, as well,” she said.

“The southwest is the strongest-performing market right now in Edmonton.”

Despite concerns about an oversupply of condos, Boytinck is optimistic for the coming year, saying the number of unsold, move-in-ready units decreased to 780 in the third quarter of 2017 from 901 in the first quarter, a 13.4 per cent drop.

November figures from the Realtors Association of Edmonton show 4,031 condos sold so far this year in the region, the lowest number in at least five years, while the average $248,902 sales price is the lowest since 2013.

But Boytinck said many purchasers were still recovering in 2017 as Alberta’s economy improved, so prices had to go down to make sales happen.

“We’re expecting stronger prices next year.”

One wild card might be the new federal rules for uninsured mortgages.

Starting in January, people providing down payments of at least 20 per cent must be able to cover an interest rate matching either the Bank of Canada’s five-year benchmark rate, now almost five per cent, or two percentage points more than the lender’s rate, whichever is higher.

This change means purchasers will be able to pay about 20 per cent less for a home than they can now, possibly leading to fewer sales or pushing people to buy condos or townhomes rather than more expensive single-family houses, Boytinck said.