Thomas Chung, at his Edmonton home.JASON FRANSON/The Globe and Mail
After a sluggish year of modest price gains, the resale market in Edmonton is showing signs of improvement, as out-of-province buyers flock to Canada’s fifth most affordable city and Calgary loses its competitive advantage.
According to a recent Royal LePage survey, Edmonton is the destination of choice for people in the Toronto and Vancouver areas who are searching for a more affordable lifestyle, people such as Thomas Chung and his small family.
Attracted by Alberta’s lower cost of living, the Chungs decided to move to the Prairie province last year, when they realized that the equity they had built up in the family’s 40-year-old townhouse in Richmond, B.C., would allow them to buy a bigger house in Edmonton and not have to carry a mortgage.
“It was a no-brainer for us to make this move,” Mr. Chung said, noting that he and his wife did plenty of research to ensure Alberta’s capital city was a good fit for them and their nine-year-old son. “I work from home, so it didn’t really affect me if I live in B.C. or Alberta, and my wife is a homemaker.”
The Globe's Most Livable Cities: How we ranked 100 of Canada's best places to live
In mid-March, the Chungs sold their Richmond property for $1-million, and immediately began the search for their dream home in Edmonton. “The minute we got an offer and the subjects removed, we booked a flight and came to Edmonton to start looking at homes,” Mr. Chung said.
A week later, the Chungs would buy a $530,000 detached home in Chappelle, a developing neighbourhood in southwest Edmonton established in 2008.
With 2,000 square feet of living space, three bedrooms, a finished basement, and a sizable backyard, the Chungs’s new home isn’t only large enough to comfortably accommodate the family’s needs well into the future, it is located just a five-minute drive away from schools, grocery stores and restaurants.
'It was quite intimidating, because some of the open houses that we went to had so many people in them,' Mr. Chung said.JASON FRANSON/The Globe and Mail
“There’s no way we could afford something like this in Vancouver,” Mr. Chung said.
But despite an abundance of choices that fit the family’s preferences, and an ample $700,000 budget, it took the Chungs more than one bid to secure a home. “It was quite intimidating, because some of the open houses that we went to had so many people in them,” Mr. Chung said. “It really felt like Vancouver in 2009-2010, when multiple offers were coming in.”
On Tuesday, the Realtors Association of Edmonton reported a 12.5 per cent increase in sales in May for homes in the detached segment, relative to the year prior, driving up the median resale price from $470,000 to $500,250.
”The Edmonton market is heating up because people are migrating here for the value of housing, compared to other parts of the country,” says Tom Shearer, broker and owner of Royal LePage Noralta in Edmonton, adding that despite increased activity, market conditions remain relatively balanced.
”We’re just seeing a nice, steady growth in pricing, which is good for a seller and also good for a buyer, because if you don’t get a place today, it won’t be out of reach tomorrow.”
However, as demand for detached homes continues to rise, the number of active listings is dwindling, particularly in suburban neighbourhoods.
”Overwhelmingly, the most amount of activity that we’re seeing in our marketplace is single family homes, and that’s simply because they’re affordable,” Mr. Shearer says. “Properties are selling very fast.”
Because demand is projected to remain steady, Mr. Shearer worries that Edmonton’s affordability advantage in the detached segment could deteriorate.
In May, one quarter of all detached sales in Edmonton took place in the city’s deep south, boosting the median resale price in this area to $570,000, roughly 15 per cent higher than the city’s total.
“The thing that we’re all worried about is having enough new construction, enough inventory, to meet the needs of people who are shopping for a home,” Mr. Shearer said.
His worries aren’t unwarranted.
Last year, the number of starts for detached homes in Edmonton dropped by roughly 30 per cent, relative to 2022, as despite the city’s lower price point in the new-build market, the new home inventory reached a record high of 958 unabsorbed units.
But as Alberta’s population growth accelerates in 2024, Edmonton homebuilders have responded swiftly. In the first quarter of this year, CMHC reported more than 2,145 detached homes under construction, which is close to the city’s 10-year average of 2,350 units a quarter.
According to Scott Fash, CEO of BILD Alberta, an organization that represents builders and developers across the province, the availability of greenfield land, low municipal development charges and levies, as well as short permit approval timelines, allow Edmonton builders to be more nimble than those in other regions.
“That’s been a reason why we have seen costs be lower in Edmonton than in Calgary,” he said. “We’ve been able to bring more supply on more quickly, and the cost to do that has been cheaper in Edmonton.”
However, city hall is considering a new measure, known as the Substantial Completion Standard, that would limit greenfield development until existing neighbourhoods are 90-per-cent built out.
“We need to figure out what that potentially will mean,” Mr. Fash said. “Because that obviously would have an impact on the availability of greenfield to respond to demand.”
Councillor Micheal Janz believes that Edmonton is well-positioned to use the city’s infrastructure more efficiently and curb urban sprawl, without undermining housing affordability.
“There’s still lots of opportunity to build single-family detached homes within existing areas,” he says. “There are tons of sites that are sitting empty.”
City administration estimates that redeveloping areas in established neighbourhoods can accommodate 600,000 additional residents.
Moreover, Mr. Janz said, a continued expansion of the options available to Edmontonians across the city would allow empty nesters to downsize and bolster the resale inventory without further subsidizing urban sprawl.
Currently, there are more than 10,000 units in Edmonton’s construction pipeline, including detached and semi-detached homes, apartments, and row houses.
“There’s a whole cohort of our population who are aging out, who may need a different choice. … The Substantial Completion Standard would help incentivize development in the core, and in areas like old shopping malls, or old businesses.”
The administration’s report on the proposed initiative will return to council’s Urban Planning Committee on June 18.