Downtown Edmonton trending towards more rentals over housing

by Neil Sharma07 Aug 2019

Should current trends hold, Edmonton could expect to see more rental units compared to housing in its downtown market, according to Altus Group.

According to a new analysis by Altus Group, this has become especially apparent over the last 12 months or so.

“What seems to be coinciding at the start of this year and the back half of last year is that the sales have been weaker. So we have seen a drop off in overall sales volume, and this is kind of encouraging developers to consider it more than they were in the past,” Altus VP of product management Matthew Boukall said in an interview with Global News.

“What’s happening is developers who may have gone to market with the intention to build condominiums are finding that pre-sales are a little bit more challenging to get, but there’s quite a bit more certainty from a rental perspective so they’re shifting into that tenure.”

Figures from Canada Mortgage and Housing Corporation showed that first-half housing starts in the market stood at 3,961. This was markedly larger than the 3,800 during the same period last year. The average price through June was at $546,000, considerably higher than the $535,000 a year ago.

The Altus analysis indicated that new multi-family home sales trended downward in 2018, with a further drop in early 2019.

“The excess inventory situation in the new condominium apartment sector has deteriorated again in the past year,” Altus explained, adding that this coincided with a significant decline in home-buying intentions this spring.

“Buyers under 35 years – who are mostly first-time buyers – accounted for about half of Edmonton home sales,” the report noted. “About one-fifth of recent first-time buyers used RRSP funds as the primary source of their down payment.”

 

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