The anual housing forecast seminar was held on Wednesday hosted by the realtors association of Edmonton. Speakers included, Angus Watt and Alison Redford.
The tone was very positive in spite of some of the negative press surrounding property prices. Alberta and Edmonton will lead the country in growth in 2013 with Alberta's above 4% and Edmonton at just over 3% driven not only by oil but a tight labour market. With the lowest unemployment rate in Canada at 4.3% and the labour market growing at a nation leading 4% in 2013. The limiting factor for growth in Alberta and Edmonton for the coming year will be the anticipated labour shortage, even with a forcast in migration to Edmonton of 16,000 new residents. Oil prices predicted to hover in the $90 - $95 range, this may present some challenges for the provincial government in light of the budget anticipating $110 oil, but still high enough to encourage development.
Mortgage rates are predicted to stay low through 2013, with downward price trends in the large markets of Vancouver and Toronto. The average single family home in Vancouver costing $682,215, eating up as much as 51% of the average family income ($67,090) Toronto is not much better at $485,328 and 35.5% of the average income ($68,810). When put in direct comparison with Edmonton's average home price of $331,526 taking 19% of a families income ($87,930) we are looking very good. As an added point of reference here are the Calgary numbers: average home price is $413,921 consuming 23.3% of the average Calgarians family income ($89,490). Tie that in with a growing economy and you can see we have reason for optomisum
So what does this mean to the Edmonton market. With a growing city and increasing demand for labour, wages may increase giving opportunities for homeownership to more, this, in turn, will stimulate the housing market. As we can see from the numbers above we either have a lot of room for price increase or, they have a long way to fall. In my opinion there will be a combination of both as markets start to stabilize. This will keep mortgage rates in check for 2013 as any increase could only compound the problems in the markets that are already starting to decline. Over the last two years we have seen the sales to listing ratio increase, what this tells us is that we are moving away from a buyers market and more towards a sellers market, as with the laws of supply and demand as the supply falls and deemed grows prices rise. CMHC is predicting just under a 3% increase in home prices by the end of 2013, with the most active price range being $350,000 - $450,000 and an increase in the number of sales by 400 to 18,400.
These are all great signs for the coming year, growing economy, in migration, housing demand increasing and affordability, we lead the country in all these areas combined with continued low interest rates this can only mean good things.
If you would like to discuss any of this or would like more detail please do not hesitate to contact me.