Spring has sprung and the Canadian housing market is getting ready for this usually busy time of year. How affordable are homes in Alberta at this time? Will we continue to see a rise in home prices, as we have seen over the past year? These are questions that our expert Alberta mortgage broker team is here to answer.
Alberta Housing Market – April 2022
Alberta's housing market began this year on an upswing, which has continued over the past few months. We have seen new life in sales activity and home prices. January saw home prices jump by 9.9% to an average of $443K, and home sales rose 26.6% compared to last January. The hot seller market we are still in is down to tight conditions between low inventory and fewer homes coming onto the market since the pandemic started 2 years ago. In January, we saw inventory drop 42.4% to only 2 ½ months' worth of inventory.
Edmonton and Calgary
In Edmonton, the average price of a home is $414K, up 0.3% from last month, up 9.4% from last quarter, and up 5.7% from this time last year. In the past 28 days, Edmonton have about 2,900 new listings come onto the market, with about 2,120 of these selling. Homes spend an average of 25 days on the market before being snapped up and most homes have a selling to list price ratio of 100%.
In the Calgary area, the average home price is currently $535K, which is down 0.9% from last month, up 6.6% from last quarter, and up 6.2% from last year. There have been about 6,300 new home listings over the past 28 days, with around 2,620 homes being sold in that time. Homes are spending an average of 19 days on the market before getting snapped up and many have had a selling to list price ratio of 101%.
Many buyers still believe they can't afford a home due to price rises and being able to save for down payments, whose cost has risen with the prices. A home that was $350K would need a 20% down payment of $70K. Now, that same home, which now costs $450K, would cost a home buyer $90K for a down payment.
Calgary was seen as one of the more affordable areas, even during the COVID pandemic, compared to many of the other urban areas. However, with so many people trying to move to what was a more affordable area, it has become more expensive. This is an area of Alberta which experts feel will remain a hot seller's market for now, with home prices rising a further 2.5% by year's end.
Edmonton could see a jump of around 7% for residential homes and a boost of 5% in sales. At the start of 2020, both Edmonton and Calgary were fairly balanced markets. But both became hot seller's markets by 2021 and have remained this way into 2022.
For sellers, this can be a great time to sell in the Alberta region, especially if you are looking to downsize and move to an area where the market prices are lower. For buyers, however, it could mean bidding wars continue and some being priced out of the market in these hot sellers' market areas.
The Alberta area is still dealing with low inventory and high demand, with the supply level being just 1.1 months of inventory, down 75% over the last 4 years and one of the lowest levels the area has seen.
There are still situations around the globe that are impacting the market, such as the conflict in Ukraine, which has caused a lot of economic uncertainty as gas, oil, and food prices rise. Just a couple of weeks ago, the Bank of Canada increased its interest rates from 0.5%, to 1%, to help combat inflation. It is expected that a further rise of 50 basis points will occur in June.
If you need advice on getting the best mortgage product for your needs, give our Expert Alberta mortgage broker team a call today!