Home sales across Canada took a hit last month, but one city appears to be bucking the trend: Edmonton. New data from the Canadian Real Estate Association (CREA) shows national home sales dropped by 0.7 percent in July compared to June.
According to senior CREA economist Shaun Cathcart, this slowdown is largely due to markets anticipating interest rate cuts. The Bank of Canada revealed two major cuts recently, lowering the key interest rate to 4.5 percent by the end of July.
While many regions experienced declining sales, Edmonton's market defied expectations with significant growth. This city's performance was particularly noticeable against the backdrop of sliding activity observed in Calgary and the Greater Toronto Area.
Realtors Association of Edmonton chair Melanie Boles highlighted how the city has outperformed conservative forecasts. "We had a very conservative forecast coming to this year, and then all of a sudden we saw our market take off with migration and our good inventory levels," she stated.
Data shows Edmonton's residential sales have significantly exceeded 2023 figures, with over 47 percent growth recorded in January alone. By April, this figure soared to 55 percent, and July saw home sales rise by 27 percent compared to the previous year.
Tom Shearer, owner of Royal LePage Noralta Real Estate, expressed optimism about the real estate activity's continued momentum. He believes this trend showcases Edmonton's unique appeal, especially when compared to other markets experiencing declining sales.
Reflecting on why Edmonton appears to withstand the downturn, Shearer noted, "It’s because we're more affordable." This affordability positions the city as an attractive destination for potential homebuyers.
Edmonton's composite benchmark housing price surpassed $400,000 for the first time since the market's peak back in spring 2022. Despite this increase, the typical home price remains significantly lower than other major Canadian cities, including Calgary, where homes are approaching $600,000.
Shearer remarked, "I don't think the rate cuts have been enough to move the needle in the more expensive marketplaces across the country." He emphasized the unique pricing environment currently existing within Edmonton, which has already factored these rate cuts.
Although the latest interest rate cuts have yet to reflect their full impact on the market, Boles pointed out tighter housing inventory levels. With less than one month since the latest cut, the city is approaching conditions typical of a sellers' market.
Experts observe numerous factors influencing Edmonton's inventory, including migration trends and new housing starts. Boles emphasized, "We’re seeing our market sustain affordability, with good listings coming onto the market and active buyer engagement, contributing to the market's stability."
Despite challenges affecting other regions, Edmonton’s housing market continues to flourish, offering affordable and attractive options. With interest rates moving downwards, the city’s growth story appears poised to continue, enticing new residents and potential investors alike.
