Edmonton real estate prices have been on the decline, with the city’s housing market ranked #3 of 16 Canadian cities when it comes to housing affordability, according to the 2020 REMAX Housing Affordability Report. While affordability is already one of the region’s biggest draws, cost-conscious home hunters in search of even better prices can find them in the communities of Oliver, North East Edmonton and Mill Woods, which have been named the most affordable neighbourhoods to buy a home in Edmonton.
Factors contributing to Edmonton real estate prices
Edmonton real estate prices have been declining, experiencing a 3.2-per-cent decrease from 2018 to 2019, and another one-per-cent decrease is expected this year (source: 2020 Housing Market Outlook Report). In light of the lowering prices, Edmonton has been named one of Canada’s most affordable housing markets, according to the new REMAX Housing Affordability Report.
In its inaugural Housing Affordability Report, REMAX examined 16 of Canada’s most populous regions and ranked them on an affordability scale, with #1 being the most affordable and #16 being the least affordable. REMAX brokers were surveyed about average home sale prices and whether they believe real estate in their region is overvalued, undervalued, or right on the money. Edmonton real estate came in at #3 of 16 cities. Canada’s most affordable city to buy a home is Regina (#1) and the least affordable place to buy a home in Vancouver (#16).
REMAX affordability ranking was determined by assessing the percentage of a buyer's monthly income needed to carry a mortgage, assuming a down payment of 25 per cent, and based on the forecasted 2020 average sale price per region and the forecasted 2019 average household income.
Edmonton real estate is currently regarded as undervalued. The implementation of the Federal mortgage stress test has unintended consequences in how it impacted Canadian homeowners. In Edmonton, the recessed economy has also added to decreased sales, which in turn has resulted in buyers being unable to qualify for a mortgage and paying more in rent than what they would be buying for.
There is also an evident division between what buyers want and what inventory is available, most of that inventory is not what buyers are looking for. First-time home buyers are looking for newer properties, but much of what is available are homes in need of renovations.
Despite the commonly held notion that housing in Canada is unaffordable, the report finds that the vast majority of Canada’s largest urban centres (75 per cent) are currently undervalued, according to a survey of REMAX brokers in 16 of Canada’s most populous cities.
In its report, REMAX explored the most popular property types sought by first-time homebuyers, the least and most affordable neighbourhoods in each of the 16 housing markets, factors preventing buyers from entering the market, and methods homebuyers are using to enhance the affordability of homes. Current and prospective Canadian homeowners were also surveyed about their sentiments around homeownership, barriers to owning a home, financial factors impacting homeownership, and what could potentially improve housing affordability.