Edmonton kicked off 2023 with a stable start; sales dropped by just 0.2% from December, according to the Edmonton Regional Real Estate Board. Like in many other Canadian markets, sales fell by 25.8% year-over-year, with the higher cost of borrowing being a major culprit for this.
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Sales of Higher Priced Properties are the Most Impacted by Rising Rates
There were 986 sales throughout January, down from last year’s 1,326. Some of this decline can be attributed to the typical winter market, but it’s also in part because of higher interest rates. With the Bank of Canada announcement of yet another rate hike in January, some buyers continued waiting on the sidelines to see how the market pans out. That hit can be mainly seen in the more expensive property types. There were 583 sales of detached homes in January, down 32% from 858 year-over-year, while semi-detached home sales were down 35.9% with just 100 homes trading hands.
Townhouse sales numbers are also down year-over-year, with 148 sold this month compared to last year’s 157. However, demand for townhouses has already grown from December which there were just 97 sales of the property type. While the more expensive home types are seeing dips in interest, buyers may be migrating towards more affordable property types this winter to combat the higher borrowing costs.
As Demand Grows for Townhouses and Apartments, So Do the Prices
The growing demand for townhouses is driving up prices, alongside condos. While the prices of detached and semi-detached homes have fallen by 4.2% to $451,659 and 0.9% to $355,086 respectively, the prices of other property types are on the rise. Townhouse prices increased by 4.4% to $247,761, while apartment prices had a 5.5% bump to $189,631. The average for all residential properties was $370,068 this month, down ever so slightly from December’s $340,000 by 1.4%.
Great News for Edmonton Buyers: Supply is Improving
While Edmonton had a quiet start in terms of sales, motivated buyers will be happy to hear that supply is growing. Inventory totalled 5,220 at the end of January, up 5.3% from December. There were also 2,297 new listings in January, up 94.8% month–over-month. With sales numbers experiencing a small decline, the growing inventory may spend a little longer on the market signaling more negotiating power for buyers.
Homes are spending an average of 66 days on the market, an increase of eight days both yearly and monthly. Detached homes are spending 65 days on the market, up 13 days month-over-month, while apartments are spending 82 days, an increase of 12 days. Buyer demand is not quite there yet, but it is possible we could see some more movement later in the year.
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