Housing forecast predicts slow and stable growth
By: Viola Pruss
| Posted: Saturday, Jan 12, 2013 06:00 am
There are no bounces, no bubbles and no bursts to be expected in the Capital region’s housing market this year, says Darrell Cook, president of the Realtors Association of Edmonton.
“The real estate market in Edmonton and the region will remain stable and steady,” Cook told some 700 realtors and business people Wednesday at the association’s annual housing forecast seminar.
Cook said average prices of single-family homes in the Edmonton region are expected to increase by two per cent in 2013, rising from $382,829 to $390,020.
The total number of homes sold is expected to go up by three per cent, which represents slower growth than in the previous year when the increase was 5.4 per cent.
David Lan, senior market analyst for the Canada Mortgage and Housing Corporation, said Edmonton will see fewer starts for condominiums in 2013 as construction from the previous year is still finishing up.
The average price for a condominium is expected to increase by one per cent, from $235,474 to $237,829.
At the same time, rental housing starts are expected to double in 2013 to more than 1,800 units.
Prices for rentals are expected to rise from an average of $1,070 per month to $1,100.
While the forecast shows slower growth in the housing market than in the previous year, Cook said many first time buyers are looking at newer homes and condos.
Sellers would need to refurbish their homes to attract buyers in the long run, he said.
He added that the inventory of housing is usually low at the beginning of the year but increasing prices would convince more homeowners to sell their property later on.
A number of speakers at the seminar said the growth in new workers attracted to the city and region largely influences Edmonton’s housing market.
John Rose, chief economist for Edmonton, said the city currently has the lowest unemployment rate in Canada at 4.3 per cent. He expects that number to decline to four per cent in 2013.
“The economy is going to be doing much better than the national economy. Edmonton will continue to be among the fastest growing regions in the province,” he said.
“People are pouring into the city. We are doing a remarkable job in terms of attracting people to move forward in this economy.”
Rose added that Edmonton is creating jobs at a rate about three times higher than the national average.
That is good for those looking for jobs, though it creates a tight labour market for employers. At the same time, a growing population means more people are looking to rent and buy homes.
Rose said rental vacancy rates are currently below two per cent, and once people move into a higher income bracket, this number will spill into the housing and resale market.
“Edmonton will continue to be one of the fastest growing areas in the province and will continue to attract people … and that is going to be relative in the housing market for Edmonton in the years to come,” he said.
Despite an overall positive outlook, Rose and others at the meeting warned that the region needs to be sensitive to changing markets in Canada and the rest of the world.
Brad Ferguson, president and CEO of the Edmonton Economic Development Corporation, said the city would not remain untouched by economic uncertainties.
“We have negative growth in Europe, the U.S. recovery continues to be stagnant, and we have growth in China that isn’t double digit growth anymore as the economy will mature and invest in social structures and infrastructures,” he said.
Cook added homebuyers should not be overly concerned by reports that the national average housing price is going up or down. He said that number is irrelevant to Edmonton as its real estate prices are below the national average, which is heavily influenced by sales in other cities.
“When you hear commentators make dire predictions about the economy, make sure they are talking about the Edmonton market and are not influenced by the view of Toronto or Vancouver,” he said.