'Little growth' expected for Edmonton housing market in 2019

If you’re in the market to buy or sell in Edmonton’s real estate market, your best bet is to be patient.

‘Supply is in abundance and demand is dropping,’ realtors association says

More than 600 Edmonton realtors attend a seminar at the Shaw Conference Centre on Wednesday. (Min Dhariwal/CBC)

If you're in the market to buy or sell in Edmonton's real estate market, your best bet is to be patient.

"We are expecting 2019 to be similar to 2018, with high inventory and lower sales continuing the downward pressure on average prices," Michael Brodrick, chair of Realtors Association of Edmonton, told 600 fellow realtors Wednesday morning.

The market will remain stagnant and will likely see little growth, he said to those attending the seminar at the Edmonton Convention Centre.

"We still had 15,500 sales last year, sales are still happening, they're just not happening as quickly and they're not happening at a price point that a lot of sellers would like them to happen at," he said.  

Last June the Edmonton area saw a record of more than 10,000 properties on the market. The average time to sell was 62 days.   

Part of the reason is potential buyers are facing more challenges, Brodrick said.

"Rising interest rates have played a role," he said. "The mortgage stress test has played a role, it was created to cool the real estate markets in Toronto and Vancouver but it was implemented as a national policy with no consideration to regional difference throughout the country, so it's impacting people here as well."

Add to that a struggling economy and looming federal and provincial elections, experts say the market might take more time to stabilize than expected.

Condo prices struggled in 2018

"The things that are happening or, more likely, not happening in Alberta are affecting everybody," Brodrick said.

While the average price for single-family homes was stable for most of 2018, it was one per cent less compared to 2017 and realtors are predicting a further decrease of 1.17 per cent this year to $428,950.

The news isn't any better for those in the market for condos, and duplexes or townhouses.

"The condominium market struggled in 2018, experiencing the lowest number of sales in more than a decade, and we expect the struggle to continue," Brodrick said.

The sale of condos is expected to decrease in the new year as will the average price, he said.

Average prices decreased 4.90 per cent reaching a five-year low and unit sales dropped 7.23 per cent to 3,967, the lowest in more than a decade.

The association predicts condo sales will decline by about two per cent, with average prices dipping 1.63 per cent and inventory sliding by 1.83 per cent.

"For me personally, this is the worst I've seen it," said Brodrick, who has been in the real estate business for 18 years.

'Lots of choice for buyers'

"The inventory's there; there's lots of choice for buyers. They simply can't meet the price point to get in."

John Rose, chief economist for the City of Edmonton, says he doesn't see anything drastic like a market collapse, but he is predicting a difficult real estate market ahead.

A city news release Wednesday predicts a slow down in the pace of new-home construction over the coming months, as builders look to manage their inventory.

But Rose is optimistic about the latter half of 2019. He predicts a more stable housing market for Edmonton as interest rates stabilize, employment and wages rise and more migration into the Edmonton region.

The Bank of Canada kept its benchmark interest rate unchanged at 1.75 per cent Wednesday, welcomed news despite the uncertain outlook for 2019, Rose said.

"Edmonton needs higher interest rates like a hole in the head," he said.

Rose sees the province's and city's economic outlook sputtering along much like the rest of the country with growth at under two per cent.

"We're just not going to see a significant recovery in investment levels related to the energy sector," he said.

"That means a big component of Edmonton's economy and particularly the provincial economy are going to flat line for the foreseeable future."