EDMONTON – In the ongoing battle of Alberta, Edmonton is coming out on top when it comes to getting the most bang for your buck in square footage.
New numbers show the average home price in Calgary is significantly more than here in Edmonton. And, that price gap is only widening.
The CMHC forecasts the average MLS home price in Edmonton this year at $360,000 and 2015’s at $369,000.
“Sometimes the prices, when you look at them in isolation, can be a little bit eye-popping,” admitted the City of Edmonton’s Chief Economist John Rose.
A local drywaller says the most expensive house he’s worked on so far this year was one worth $3.5 million.
“Not affordable for a first home buyer,” said Bryan Lung. “You can’t even pick up a 1950s-built, older part of Edmonton house, for less than $300,000.”
“The new houses that are being built are smaller, geared toward a new home buyer, but it’s still out of reach for everybody.”
READ MORE: Average single family home price in Edmonton at record high
However, when put into perspective, Rose says the city’s housing prices aren’t unrealistic.
“When you look at housing affordability issues, Edmonton is actually – among Canada’s major metropolitan areas – one of the most affordable in terms of housing,” he explained. “You have to bear in mind that incomes in Edmonton are about 20 per cent above the national average.”
“It’s a very affordable market.”
Compared to Edmonton, housing prices in Calgary have traditionally been higher. The price of an average home there this year is forecast about $99,000 higher than in Edmonton, coming in at $459,000. In 2015, the price difference between the two cities is expected to grow to about $103,000.
“Incomes in Calgary are higher, so that tends to drive prices up,” explained Rose.
“As well, you’ve got some distortion still remaining from the floods in 2013 which used up materials, equipment, labour, and that tended to boost prices for new housing as well.”
“In the background, there are some concerns about land supply, and how that’s affecting the cost for new housing in Calgary as well,” added Rose.
WATCH: Edmonton real estate: most affordable major market in Canada?
But, he says the two biggest factors impacting prices are the economy and migration into the city.
“We’ve seen very, very, very strong migration numbers.”
“The word is out that there are employment opportunities in Edmonton and it’s a relatively affordable place to move.”
Rose also warned against comparing Edmonton’s housing market with others across the country.
“There is a risk, I think, that if people see the Toronto market or the Vancouver market or the Calgary market go sour, that they will have concerns about Edmonton, where the situations and fundamentals are very different.”
Meanwhile, when it comes to housing starts, the trend is a downward one.
According to the CMHC, housing starts in Edmonton are forecast to be 13,300 this year. That’s a decrease from 2013, and the forecast shows the slowdown continuing into next year.
“What we’re seeing is a moderation in the level of housing starts. In Edmonton and in the Edmonton region, we were working at very, very high levels of new housing starts from the end of 2012 to the end of 2013,” said Rose. “Those levels or starts were not sustainable.”
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