The Gateway to the North is coming off a rocky year for real estate activity, as 2018 home sales reacted to pressure from the national mortgage stress test.
This new borrowing criteria, which was introduced in January of last year, effectively tacks 2% onto the mortgage rate borrowers must prove they can afford in order to get home financing; while designed to reduce risky debt practices in Canada, it has downsized the budgets and home type expectations for many prospective buyers, the effects of which have been keenly felt in demand for MLS listings in Edmonton.
Slower Sales Outweighed by Supply
Similar to the challenges facing MLS listings in Calgary, the city has grappled with slowing sales and elevated supply in recent months; according to the REALTORS Association of Edmonton, sales plunged 19.65% year over year in December 2018, and 15% in January. That’s softened the market’s sales-to-new-listings ratio, which gauges the level of buyer competition, to 47% (verging on buyers’ market territory). The board’s year-end report advises “Sellers will need to continue to be patient and flexible.”
The Impact on Edmonton Real Estate Prices
Despite this, the average home price in Greater Edmonton has remained relatively stable, dropping -1.3% over the course of the year to $369,607, representing a dollar loss of $4,793. However, the impact of a slowing market has been much more felt in some communities than others; according to recent calculations made by Zoocasa, year-over-year dollar loss ranges in the tens of thousands of dollars across the region.
In fact, of the 11 markets studied, only two – St. Albert and Beaumont – experienced modest year-over-year home price appreciation, up1.2% (+$5,311) and 1.1% (+$4,708), respectively.
The hardest-hit price-wise was the town of Gibbons, where the average home price fell -14.6% to $266,943 – a significant dollar loss of $45,537. While less steep, Sherwood Park saw the second greatest decline with the average price down -3.1% to $409,299, a drop of $13,171. That’s followed by the community of Devon, where prices fell -2.3% to $315,300, representing a drop of $7,557.
Check out the infographic below to see how year-over-year prices range in markets across Edmonton:
Edmonton Markets with Biggest Year-over-Year Losses
1 – Gibbons
2018 Average Home Price: $266,943
Y-o-Y & Change: -14.6%
Y-o-Y $ Change: -$45,537
2 – Sherwood Park
2018 Average Home Price: $409,299
Y-o-Y & Change: -3.1%
Y-o-Y $ Change: -$13,171
3 – Devon
2018 Average Home Price: $315,300
Y-o-Y & Change: -2.3%
Y-o-Y $ Change: -$7,557
Edmonton Markets with Biggest Year-over-Year Gains
1 – St. Albert
2018 Average Home Price: $432,127
Y-o-Y & Change: +1.2%
Y-o-Y $ Change: +$5,311
2 – Beaumont
2018 Average Home Price: $438,656
Y-o-Y & Change: +1.1%
Y-o-Y $ Change: +$4,708
3 – Stony Plain
2018 Average Home Price: $325,945
Y-o-Y & Change: -0.2%
Y-o-Y $ Change: -$674
Average home prices were sourced from the REALTORS Association of Edmonton. Changes in home prices (% and $) were calculated by Zoocasa.
Zoocasa.com is a real estate brokerage that provides advanced online search tools and data to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free real estate iOS app.
For more information about this report or to set up a media interview, please email [email protected].
Penelope Graham is the Managing Editor at Zoocasa, and has over a decade of experience covering real estate, mortgage, and personal finance topics. Her commentary on the housing market is frequently featured on both national and local media outlets including BNN Bloomberg, CBC, The Toronto Star, National Post, and The Huffington Post. When not keeping an eye on Toronto's hot housing market, she can be found brunching in one of the city's many vibrant neighbourhoods, travelling abroad, or in the dance studio.