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Properties in Edmonton Vs. Canadian Real Estate Market

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Canadian real estate listings are continuing to sell for an astronomical price. For most Canadians, the concept of homeownership is out of the question. Unless you are willing to spend half of your household income, owning a home is nearly impossible for those in the middle class. Almost all of the cities within Canada have sky-high housing prices. Despite these facts, properties in Edmonton are selling for substantially less money. Find out more about the affordability of the Canadian housing market by reading below.

Skewed Income to Homeownership Ratio in Canada.

In the past, it wasn’t as difficult for middle-class families to afford a home. In large cities, people were able to move to smaller areas and find more affordable real estate. However, this is no longer the case. Cities where families were once able to find refuge from high real estate prices are now too far out of reach for most people’s monthly incomes. The average middle-class family now needs to fork out over 50% of their monthly income in order to take on a mortgage. This has contributed to a large gap in affordability across the country. 

For instance, in a place like Toronto, the average household would need to spend 75% of their income on their mortgage. This is over 50% more than what the previous generation needed to spend on their mortgages. Thus, making it extremely difficult for anyone to purchase a house in the Toronto area. 

Another city in Canada that lacks affordable housing is Vancouver. Vancouver’s real estate is up there with some of the most expensive housing in the world. The discrepancy between income and housing price is vast in the Vancouver area. For example, the median household would need to spend nearly 82% of their income to pay monthly mortgage payments. This is the most extreme example in all of Canada. 

The average family income would need to be 50% higher than what it is currently in order to comfortably afford your average home in Canada. Affordability has rapidly dissipated from the Canadian housing market. It has been over 27 years since the cost of living has been this high, this fast. Getting on the property ladder has never been so difficult for young buyers. This is because the average household needs to make 154k per year to afford a home.

Properties in Edmonton Are More Affordable than in Other Canadian Cities.

If you don’t make 154k per year, owning a home might seem impossible. Or, too risky for your budget. However, for those looking to make the move to Alberta, homeownership might be in the realm of possibility. Calgary and Edmonton are the only two major markets that boast affordability. Contrary to the rest of Canada, those living in Calgary only need to spend 27% of their income on their mortgages. This is a considerable decrease in price compared to cities like Vancouver or Toronto. In addition, Edmonton has seen an even bigger reduction in price. Edmonton homeowners only need to pay 25% of their income in order to carry a mortgage. Buying a home is more comfortable for middle-class families in Edmonton and Calgary. 

Properties in Edmonton are starting to become even more affordable. This is thanks to higher salaries within the city, more supply, and slowing demand. Furthermore, taxes in Alberta are lower than in other provinces in the country. This ensures that families have a higher disposable income. In addition, your typical Albertan family is likely to be able to afford a home without any concern. Although, there still remains work to be done for low-income families and marginalized populations. Despite this, it is much easier for young buyers and new families to buy properties in Edmonton as opposed to other Canadian cities. 

Contact Us About Properties in Edmonton!

The real estate market is much more affordable if you live in Edmonton. Make the decision to buy properties in Edmonton today for more financial comfort. If you have any questions or concerns about buying a property in Edmonton, contact us today. Don’t hesitate to reach out if you’re interested in buying a new home. Our team can put you in touch with the resources you need to get your real estate goals on track. Be sure to check out our social media for the latest updates and more! We look forward to working with you in the near future!

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REALTORS® in Edmonton Advise Buyers to Act Fast!

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For REALTORS® in Edmonton, things are heating up fast. In what is normally a quiet month for real estate in Edmonton, homes are being sold at every turn. Anyone who is interested in purchasing a home in the Edmonton area is advised to act fast. Homes are lasting a short time on the market according to the most recent stats from the REALTORS® Association of Edmonton. It is blatantly obvious that Edmonton’s real estate market is doing better than ever before. In addition to this, the Bank of Canada just hiked the interest rates in an attempt to rein in inflation. Learn more about the market conditions in Edmonton, recent statistics from February, and interest rate hikes in the article below. 

REALTORS® in Edmonton are Busier Than Ever.

Edmonton’s real estate market is showing strong momentum through what should be a quiet month. In comparison to other years, the market condition in Edmonton is looking up. According to Tom Shearer, in an article by the Edmonton Journal, he said “In Edmonton we’re lucky if we see more than 20 houses sell over $1 million,” no matter the month. Currently, the number of homes being sold over $1 million is much higher. 34 homes were recorded to be sold in the million-dollar-plus range. In addition, it should be noted that a February this successful is out of the ordinary. Most of the increase in sales is due to people wanting a bigger home or people looking to purchase their first home. 

Moreover, an influx of people looking to buy property in Edmonton from out-of-town are now making up a portion of sales in the city. Since housing in Edmonton is more affordable than in other major cities, investors are buying what they can. According to the same article by the Edmonton Journal this “hasn’t happened in a long time”. 

People are finally beginning to realize the opportunities that are present in Edmonton. Quality of life, housing affordability, and job opportunities are all major factors in people making the move to Edmonton. 

February Market Statistics in Edmonton

In February, the total residential unit sales increased to 69.3% in the Greater Edmonton area. This is up from last year’s 41.7% residential unit sales. Single-family homes were up 35.6% year-over-year. The average price of a single-family home was $493,545. Thus, indicating a 12.7% increase in price from 2021. 

As for condos, the number of sales increased 55.2% from February 2021. Furthermore, the average sale price for a condo was $226,811. This means a 1.8% decrease compared to last year during February. 

Additionally, duplex unit sales jumped up 55.9% year-over-year. Prices of duplexes in Edmonton saw a small spike in price by 9.1% from February 2021. The average cost of a duplex was $374,290

Homes in the Greater Edmonton Area are moving quickly as we progress into spring. Once the warmer months hit it is likely that housing sales will continue to gain momentum. During the month of February single-family houses and duplexes only lasted 42 on the market on average. This is a 5-6 day decrease from February 2021. REALTORS® in Edmonton are optimistic about the market condition for the remainder of 2022. For a more in-depth look at the February market stats, click here. 

REALTORS® in Edmonton on the Recent Key Interest Rate Hikes. 

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For those who are not aware, the Bank of Canada raised its key interest rate to 0.5% on March 2nd, 2022. This was done in an effort to dampen inflation. Presently, Canadians are seeing some of the highest points of inflation in decades. The decision to raise the benchmark interest rate is expected to be the first of many small rate hikes in 2022. 

The latest interest rate hike will certainly be affecting those with mortgages, lines of credit and savings accounts. In our article last month, we discussed what would be to come for mortgages in Edmonton. You can learn more about that by reading the article “Mortgage Forecast for Edmonton Real Estate”. 

Lenders are beginning to act in accordance with the most recent hike, as many are raising their prime lending rate. Mortgage payments could start to snowball as rates heighten.

Inflation is rumoured to be growing at a rate faster than what was anticipated. With the ongoing effects from the pandemic and now War in Ukraine, all outside factors are contributing to the quick, increase in interest rates.

Contact REALTORS® in Edmonton Today!

With everything going on in the world, buying real estate can appear intimidating. However, with the help of an experienced REALTOR® in Edmonton, the process is not difficult at all. If you have any questions or concerns about buying a home in Edmonton, contact us today. Don’t hesitate to reach out if you’re curious about the most recent interest rate hikes that will affect your mortgage payment. Our team can put you in touch with the resources you need to get your real estate goals on track. We look forward to working with you in the near future!