The Edmonton Housing Market is Looking Strong in 2022
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Edmonton Housing Market Forecast for 2022
Unless you’ve been living under a rock, the real estate market has been the hottest topic for the past year. Considering how COVID-19 restrictions uprooted the traditional office, people are taking a step back and reevaluating where they want to work.
It’s not that different over here in Edmonton. Paul Gravelle, the Realtors Association of Edmonton board chair, noted November 2021 was a record-breaking month in terms of sales. “We ended the year (2021) with around 37,000 listings, which was a 10% increase from 2020, and we sold about 25,000 units, resulting in about a 25% increase from the previous year.” As the capital of Alberta and the second-largest urban city in the province, you might be eyeing Edmonton too. House prices are reasonable compared to British Columbia and Ontario.
REALTORS® around the greater Edmonton area has assisted dozens of families in buying a home in Edmonton. But how long will these conditions last? If you’re searching for a home in Edmonton, then keep reading to see what the housing market will look like for 2022.
3 Predictions for the Edmonton Housing Market
At this rate, REALTORS® remains optimistic about Edmonton’s real estate market. Here are their top three predictions for the housing market.
Interest rates hit a historic low, resulting in buyers rushing to lock in fixed rates. The Bank of Canada delayed raising its rates, but they’ve indicated prices will increase. Many financial experts predict short-term interest will grow 0.75% near the end of 2022.
A rate hike won’t dramatically impact the market but it’s expected to cool the red hot market. It’ll give buyers, especially first-time homebuyers, the opportunity to buy a home.
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Inventory Levels Remain Low
With low-interest rates, demand for single-family homes has shot up. Edmonton sold 25,000 units in 2021, which is a 25% increase from the previous year.
Land developers are hammering away to meet demand. Some of Edmonton’s best neighbourhoods like Chappelle, Windermere, and Summerside sold exceptionally well. There’s also strong demand in Keswick, Glenridding Ravine, and Secord for lot registration.
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Inter-provincial Migration Continues
As long as interest rates remain low and Edmonton has affordable home prices, we can expect more Canadians to call Edmonton their new home. As prices continue in an upward trajectory, many residents are on the search for affordable housing.
As Edmonton’s population grows, it will keep inventory tight. In areas with a low supply of inventory and high demand, prices will inevitably go up.
Fun fact, did you know we’re home to Canada’s largest planetarium and living history museum? Or that we have one of the world’s largest malls? It’s hard not to see why so many people would want to live here!
Image Source: West Edmonton Mall Facebook
Trends Impacting the Edmonton Housing Market in 2022
Despite a strong demand for housing, many cities across Canada struggled with inventory. Several trends contribute to the current situation we’re in.
As we all know, it all began with the global pandemic. When social distancing was first put into place, it created a negative chain of effects. As we continue to feel the ripple effect to this day, we can see three ways it’s affected housing.
Non-essential businesses were ordered to close their doors and workers went home. The economy took a hit and the Bank of Canada lowered interest rates as a countermeasure. Rates dropped to a historically low 0.25% to “support consumers and businesses by lowering payments on existing and new loans throughout the economy.”
Unbelievably good rates mixed with remote work led to a demand in single-family homes. But many cities weren’t ready for this demand and struggled to maintain supply, which leads us to our next trend.
Image Source: Bank of Canada Twitter
Supply Chain Disruptions
Many essential workers affected by the coronavirus were forced to isolate themselves. Worker shortages affected every industry, including lumber imports and construction.
A shortage of lumber affected the price of our homes and supply. Half of the major producers for lumber are located in British Columbia and if you remember back in December, the province suffered flooding. It effectively disrupted lumber imports to the rest of Canada.
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Supply and Demand
Low-interest rates, supply chain disruptions, and high demand result in low supply. Every province reported over several months they’ve struggled with inventory but it hasn’t deterred buyers.
Even with the possibility of interest rates rising again, people are still interested in active single-family home listings. Bidding wars are still occurring. Demand will continue to grow. The Canada Mortgage and Housing Corporation predicted a 5% increase in the average house price. Fannie Mae estimates 7.4% and Goldman Sachs is saying double with 16%.
Image Source: Pexels
Getting Ahead of the Market
No one can say for sure how the housing market activity will turn out. Buying a home is competitive so you have to be ready anytime you find a home you’re interested in. One of the best ways is to prepare a homebuyer’s wishlist so you know exactly what to look for. A homebuyer’s wishlist prepares you for the type of home you want and gives your bank an idea if you can afford it.
Use this free home evaluation tool to know how much your house is worth in 2022.
As active buyers get ready to put down an offer, they should keep in mind that:
- Low-interest rates could rise by the end of the year, so prepare to carry a higher mortgage if it happens.
- Inventory is still low even though developers are working hard to get homes ready. Bidding wars and higher asking prices are inevitable.
- More people are moving to Edmonton. We’re expected to be a population of 2.24 million by 2044, meaning we’ll still struggle with the inventory.
- Parts of Canada are ready to accept COVID-19 will be a part of everyday life but it will continue to affect the supply chain. The supply chain will affect the prices of real estate.
It’s difficult to keep an eye on MLS listings all the time and find the right neighbourhood. If you need a helping hand, my door is always open!