Edmonton a seller's market with a lot of new construction in the works, realtor says

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The Bank of Canada’s latest cut to its key interest rate — the agency’s third consecutive cut since June to 4.25 per cent — has raised questions about how the move might affect Edmonton’s housing market.

John Carter, a broker and owner at Re/Max River City, sat down with Postmedia to discuss what buyers and sellers should expect and which areas of the market are doing well.

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The interview has been edited for length and clarity.

What does the rate cut mean for people in Edmonton looking to buy or sell? 

For the most part, it’s adding consumer confidence. People feel that rates are moving in the right direction now and they are more optimistic.

Our values are going up largely driven by the amount of Ontarians moving here and investing in real estate in Edmonton. There’s more people and more demand than there is supply of properties, so we’re building a lot of new homes and that’s going to start to help meet the supply.

But at the end of the day, values are going up faster than the interest rate savings. For Edmonton’s market, our advice is don’t wait until rates drop to enter the market.

Each little rate drop that we’re seeing starts to have certain buyers come off the shelf that are now able to enter the market. But sometimes they’re then having to lower their expectations about what they can buy because the values have gone up, but it adds more demand.

Your report said Edmonton is currently a seller’s market. What does that mean for sellers right now?

The biggest challenge for most sellers is if they still need a place to live.

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There’s a lot of inventory that we call “shadow inventory” that’s sort of locked up right now because the owner of the property wants to sell but it’s not serving their needs anymore. They can’t sell it yet because they need to buy something and they’re waiting for the property to buy before they’ll sell.

So it’s really important to use a realtor to help navigate that. What we call buying backwards, if you get your qualification in order with the mortgage person, to know if you’re able to buy the new place without having to sell the old place or structuring the deal accordingly.

Low-end condos are selling very well. Stuff that people have been sitting on and unable to sell in some cases for more than 10 years, they sell really fast and a lot of investors are buying them, or people are buying them as a starter property.

The amount of new construction that’s happening because the City of Edmonton did a big bylaw change, that’s quite progressive. There’s a ton of new product under construction and that’s what buyers want.

Once the properties are built, then they’re selling their older property and they’re moving up and you see a lot of it is couples and families and lifestyles have changed.

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It’s still that post-pandemic (trend), they want a home gym, a home office, green space and a yard, close to good schools and all those kinds of amenities.

The perimeters of Edmonton are where there’s the most demand right now because of Anthony Henday Drive. We’re actually seeing the most sales volume in the $400,000 to $500,000 price point, even $350,000 to $500,000, because you can get some attached-style new construction product or a duplex townhouse style for brand new.

But in those periphery areas in the $500,000 to $800,000 range, what we’re seeing is that price point bumps up a little bit as rates go down. All of a sudden you’ll start seeing the average go up of what people can afford and what they’re buying.

What is inventory like in Edmonton for those searching for a home? Is it challenging?

It’s very segmented by age, product type and price. If you’re buying in the $600,000 to $1 million range and you want 10 years older or more, it’s a buyer’s market.

Anything under a half million dollars is competitive, usually multiple offers and that’s where usually the Ontario buyer is willing to pay more and so local buyers do lose.

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When there’s an Ontario buyer, 90 per cent of the time they win in a multiple-offer (scenario).

The other side of the market is our luxury market — the vast majority of properties selling are between $1 million and $2 million. You get a lot of houses in a great location with a large yard for brand new.

ctran@postmedia.com

X: @kccindytran

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