Edmonton, September 4, 2013: The local housing market will not feel any pressure from the recent mortgage rate increases, according to the REALTORS® Association of Edmonton. Several of the major banks increased their mortgage rates in August because of changes in the bond market. The higher rate will increase the monthly payments on a typical mortgage or decrease the total amount that a buyer can borrow from their financial institution.
“Buyers applying for a mortgage now may have to buy a slightly less expensive property than before because their qualification amount may be lower,” said President Darrell Cook. “In the short term, any reduction in the number of buyers will be made up by the potential buyers becoming more motivated to buy before their pre-approval period ends.”
The all-residential average* price in the Edmonton CMA in August was up a quarter of a percent from last month at $351,455. The average price for a single family detached (SFD) property in the Edmonton Census Metropolitan Area (CMA) in August was $416,494, up 1.5% from July but up 5.4% from a year ago. Condominium average prices were also up by 0.9% at $244,675. Duplex/row house prices rallied in August after a price dip in July at $337,745 (up 2.1%).
As compared to August 2012, prices of all types of residential property were up: SFD up 5.4%, condos up 3.8%, and duplex/rowhouses up 12.1%. The all-residential average price was up 3.7% over the same time last year.
“Our market continues to exhibit strong fundamentals,” said Cook. “Rental vacancy rates are low at about 1.2%, new home starts are up and weekly take-home pay rates are the highest in Canada. The upward pressure on housing prices will be moderated by the seasonal decreases as we approach winter.” Despite the increases, housing prices in Edmonton continue to be affordable, mainly because of the higher average incomes.
The sales-to-listing ratio of 65% was the result of 2,299 residential listings and 1,490 residential sales in August. The inventory of available homes on the Edmonton MLS® System was down from 5,834 units in July to 5,557 units in August. It took 53 days on average to sell a home in the Edmonton area.
The total value of MLS® sales YTD is the highest it has been in five years at $5.8 billion as a result of stronger sales numbers and higher prices overall.