Conditions are expected to continue and remain strong to support our local housing market in 2024, including an economy that many are predicting will outperform other provinces across Canada this year. This comes as no surprise given that Statistics Canada recently announced Alberta recorded interprovincial migration gains of 10,000 people or more for five consecutive quarters. We haven’t seen these types of numbers since 1971. This is due to several factors including a strong energy sector and investment activity as well as good employment numbers and new projects to support them.
Although interest rates are currently higher than what we saw in 2020 and 2021, The Bank of Canada has indicated a likelihood of maintaining stability, and there are indications that reductions may potentially be implemented later this year. As rates look to decrease, expect to see more listings hit the market. There may be a small impact from those who have previously held off on the decision to enter the real estate space when interest rates and inflation spiked over the last two years. Understanding this delicate interplay between migration, employment, interest rates, housing types, and potential risks provides a comprehensive forecast and a clearer perspective on Edmonton’s housing market for the upcoming year.
There are mitigating factors that could impact what is being forecasted today. Although the Conference Board of Canada has predicted the migration numbers into Alberta will slightly drop in 2024, our strong economic outlook could see this shift to an overall rise. Any substantial increase in population growth to Alberta, Edmonton specifically, could strain the housing market as inventory levels can’t keep up with the demand for homes. This could lead to increased average prices as supply levels drop, an issue seen in Calgary over the last few years.
Compared to last year, the REALTORS® Association of Edmonton’s forecast for this year is looking more positive, although only at a marginal rate. The Association predicts that the Edmonton real estate market will remain stable and balanced throughout 2024, with opportunities on both the buying and selling side. Growth will continue in the apartment/condo classification, as migration numbers support the demand on both the rental and resale markets. This growth could also be due to the increase in interest rates and prospective homebuyers needing to decrease their spending budget or who may have paused their home-buying journey and need to rent in the interim.
There is an expectation for price adjustments for detached properties in the upper luxury markets as the months of inventory climbed to 10, whereas the $200 – $500K properties average about only two months of inventory available. Properties listed at a higher selling price may be appealing for those migrating from high-priced markets and may be looking for more bang for their buck. While it’s been noted that inventory is lower, it’s still not at record levels like in 2006 or 2007.
Overall, the RAE expects to see a 2.8% increase in total residential sales, a 4.6% rise in new listings and a slight increase of 1.2% for average residential sale price. For average Detached home prices in 2024, expect a 1% increase compared to 2023. Semi-detached average prices are forecasted to jump up 1.2%. For both Row/Townhouses and Apartment/Condos, there could be a 1.1% increase in average prices in 2024.
Sales for Detached homes in 2024 are expected to rise by 5%, while the Semi-Detached category could see a 4% increase. For the Row/Townhouse category, sales in 2024 are expected to jump by 2% compared to last year. Moderate growth is expected for Apartments/Condos, with a 4.4% increase year-over-year.
New listings are forecasted to rise by 6.7% for Detached homes this year, while Semi-Detached homes are likely to see a substantial increase of 9.2% from 2023. Moderate change is expected in new listings for the Row/Townhouse category at a 1.9% increase, with Apartment/Condominium listings also rising almost 2% year-over-year.
Compared to last year’s Forecast, things look much sunnier for the Greater Edmonton Area. Edmonton’s housing market seems positioned for stability and growth in 2024, driven by consistent migration, strong employment, and a positive economic outlook. Despite potential risks and uncertainties, the market’s resilience and consistent performance are noteworthy.
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