More first-time homebuyers expected in Edmonton this fall

Article content

Edmonton’s fall for resale real estate market will be fuelled by first-time buyers even as a new survey points to falling interest among young Canadians in homeownership.

“When you think about who is typically buying at this time of year in Edmonton, it is first-time buyers,” says Tom Shearer, broker/owner of Royal LePage Noralta Real Estate.

“Those types of buyers become more active because they’re not competing against families like in the spring, which is the busiest season for real estate.”

Article content

With interest rates having come down and expected to fall further in the coming weeks, fall could be even busier than the typical autumn, he adds.

Still, a recent survey, Royal LePage 2024 Demographic Survey: Next Generation of Buyers, found marginally waning interest in homeownership among generation Z and younger millennials (Canadians age 18 to 38).

Across Canada, 84 per cent say homeownership is a worthwhile investment. Alberta respondents are slightly more bullish at 86 per cent versus 83 per cent in British Columbia and 82 per cent in Ontario.

The results still point to a very high percentage of would-be first-time buyers, but the survey reveals a decline in young Canadian adults’ confidence in homeownership from previous generations, including millennials, says Phil Soper, president and chief executive officer at Royal LePage.

“Earlier studies by us show that millennials were more in the 85 to 89 per cent range.”

The drop in enthusiasm makes sense to those familiar with market conditions.

Soper points to Canada’s largest markets like Vancouver and Toronto having a lack of affordable homes, while many markets are mired in a “slump.”

Article content

Article content

To that end, Canadian Real Estate Association figures from August show the benchmark price of a home in Greater Vancouver was flat year over year at about $1.195 million. In the Greater Toronto Area, the price had fallen about five per cent to $1.08 million.

The flat or declining price growth has not made a significant dent in affordability in those markets for young buyers who, at the same time, worry about buying into a market that could still see more price declines, Soper says.

“It’s a different scene in Edmonton,” Soper notes.

CREA statistics show the benchmark price of a home was about $400,000 in August.

Even a single-family detached home remains within reach for first-time buyers in Edmonton.

Last month, the benchmark price for a single-family home was about $463,000, CREA numbers show.

Shearer notes the benchmark price likely would get a first-time buyer a 2,200-square-foot, two-storey home with a double-attached garage.

“When I was starting out, there was no way I could have afforded to pay that much for a house, but now, for a double-income couple, it doesn’t seem so bad to them, especially if they are comparing prices with other major centres across the country.”

Article content

More first-time buyers, however, are looking at lower priced housing types like semi-detached, townhomes or apartments in the city, Shearer says. CREA statistics show, for example, the benchmark row home price in Edmonton was $270,000 in August. For an apartment condominium, the benchmark price was about $198,000.

“That’s the big decision first-time buyers have to make right now: Do they compromise on what they want and buy a less ideal, more affordable property, or do they wait until spring to see if they can afford what they want when rates are lower?”

Although falling rates will increase purchasing power, prices are also likely to increase.

“So what is hot this year may even be hotter this year,” Shearer says.

Article content