Buying a Home in Alberta: Why Now is the Time to Act
People have long been drawn to Alberta in search of new careers, the mountains, or simply a change of lifestyle. Many residents of Ontario and Quebec have been looking for more affordable housing options and space in the Alberta real estate market for the better part of the past two years. Even though the housing market in Alberta is busier than usual, it is still recording average prices that are significantly lower than those in bigger provinces like Ontario, Quebec, and British Columbia. This makes it an ideal (and affordable) place for young professionals and first-time homebuyers to relocate and start a life.
Despite a recent slowdown, Alberta real estate remains strong.
Since the record-breaking sales that dominated much of last year, housing markets across Canada have been gradually cooling. Markets all over Canada have been booming, and the majority have transitioned into a scorching seller’s market, largely due to the pandemic and its effects on daily life.
While Alberta real estate is following the same pattern, demand activity hasn’t been able to match the scorching sales numbers from 2020 and 2021.
According to the Alberta Real Estate Association (AREA), provincial home sales decreased 32.2% from December 2021 to December 2022, reaching 3,296 units. Calgary and Edmonton reported declines in home sales of 31% and 26%, respectively, in some of the province’s top housing markets. Compared to Edmonton, where 712 units were exchanged, Calgary saw 1,204 transactions.
The breakdown of sales volumes for the entire year of 2022 is as follows:.
- Alberta: -2 per cent decline to 84,050 units.
- Calgary: +7 per cent to 29,672 units.
- Edmonton: +1 per cent to 17,3030 units.
Considering how quickly homes are still selling across the province, it’s critical to have a sufficient influx of new listings. This is not the case, though, for the province as a whole. While the number of new homes listed in some Alberta communities, like Red Deer and Fort McMurray, is rising, the number of new listings across the entire province has reached zero. 3,498 new homes were listed for sale in December 2022, and there were already close to 15,000 homes for sale. Both showed declines of 17.5% and 1.8% from the previous year, respectively.
The average price of residential real estate in Alberta has once again increased as a result of persistently strong demand and a modest number of new listings. In actuality, by the end of December 2022, Alberta home prices were still strong, with the overall residential average price rising by almost three percent to $429,496. Home prices increased 5% overall in 2022 to $447,454.
Average prices increased by 5% and 2% in Calgary and Edmonton, to $516,865 and $394,057, respectively.
The inventory of homes in Alberta is low, despite the fact that housing prices are still rising; this trend is shared by markets across Canada. Houses are hard to come by, and a lot of potential buyers are being shut out of the market, as there was 1.8 percent less inventory at the end of December 2022 than there was a year ago.
Inventory is running out, particularly in Lethbridge and Medicine Hat. Lethbridge saw a 25 percent increase in inventory overall in December, in addition to a 16 percent decline in new listings. With a 33 percent decrease in new listings and a nine percent decrease in total inventory year over year, Medicine Hat wasn’t far behind. Unlike the national trend, neither of these cities is seeing a sharp decline in home prices, despite the fact that the average property price in both markets is lower than the provincial average.
Will Alberta Continue to Balance Back Out?
Even though the real estate markets in Alberta are constantly changing, the overall market in the province as a whole has remained stable. There is hope that Alberta will continue to move toward more neutral ground as some areas experience an increase in new listings while others experience a decline in sales.
Prices aren’t rising as quickly as they were at this time last year because conditions are starting to improve. The Alberta housing market may naturally change course as 2023 approaches and revert to a buyer’s market, as is customary for the bitterly cold winters in that province.
Calgary home prices are anticipated to increase 7%, according to the RE/MAX 2023 Canadian Housing Market Outlook. This year, sales prices in Edmonton may increase by 3%.