2019 Real Estate and Housing Forecast Seminar – In Review
Today was the annual Realtors® Association of Edmonton 2019 Housing Forecast Seminar at the Edmonton Convention Centre (the old Shaw Conference Centre). This year boasted a great group of speakers! The knowledge and insights presented have great value for anyone wondering “what is happening in the economy and real estate market in 2019 and the future”.
The very well spoken and knowledgable speakers included: Chairs from the Realtor’s® association, chief economist with the city of Edmonton, a senior analyst withe the Canada Mortgage and Housing Corporation (CMHC), and the Executive Vice President of Banking with Canadian Western Bank (CWB). I wanted to share some insight and summary of the day and inform those curios what these experts expect for 2019. There are some aspects that can not be predicted at this time but would drastically boost these projections and help all Albertans and Edmontonians. These include policy and political changes, trans mountain pipe line advances, oil prices, and other macro economic drivers.
A short summary for 2019 is as follows. Expect another difficult economic year in 2019 with increased inventory, decreased sales volume, and average prices decreasing similar to what we seen in 2018. The longer future is very optimistic and stable. We should see rebounds by the fourth quarter of 2019 as inflation, unemployment rates, are both decreasing. While interest rates should remain stable with possibly one more increase throughout the year.
Key Points of the 2019 Real Estate and Housing Forecast
– Unit sales for residential units to decrease overall in 2019 by approximately 1-2% across the market
– Inventory is expected to increase between 1 – 2 % across the board in 2019
– Prices will remain stable for average price and median prices with slight drops. The highest expected decrease in prices to effect the condominium market by approximately 2%. 1-2% decrease in price across all housing markets.
– The most stable market to remain the duplex and row housing market boosted by settling into the most affordable and active price point between $300,000 – $350,000 while also benefiting from a forecasted slight decrease in inventory amongst this specific sector.
– Inflation is expected to decrease to about 2% which will better support the real income of the average overall spending power.
– GDP per Capita is forecasted to gradually grow over the next 10 – 20 years. In 2018 the City of Edmonton GDP per capita was $67,302. In comparison, before the recession, in 2017 we were well over $70,000 and expected to reach this again by 2027. Slow growth expected with moderate inflation.
– Average Rent is to remain strong and increase slightly as the affordability for purchasing homes remains difficult for most individuals. Vacancy rates are starting to come down from 2016 and 2017 (where we seen a decrease in rent prices).
Interesting Statistics and Facts from the Event
– Listings and inventory increased to record highs in June 2018
– 2018 National MLS® HPI Benchmark Prices. Edmonton sits 13th overall at $321,800. The country sits at $488,080. The highest is greater Vancouver at $1,042,080 and Calgary sits at $418,300.
– 2018 Average Prices for Edmonton and Surrounding Area Highest Average Price to Lowest (St Albert, Edmonton, Sherwood Park, Beaumont, Fort Saskatchewan, Spruce Grove, Leduc Stoney Plain)
– Employment: Unemployment rate has decreased from some historic (5 year) highs in 2017, approximately 8%, to 6% in the third quarter of 2018. This is also highlighted with an overall increase in overall jobs in the Edmonton market (765,000 jobs in Q1 2018 to 785,000 jobs in Q3 2018). In comparison before the 2015 Alberta Recession, the 2014 unemployment rate was close to 5.5%. There has been a very notable shift in Edmonton employment away from industrial with a higher focus on public works, education, and health care.
– Consumer debt has decreased significantly from 2015 and 2016 but not to as low as it previous was in and before 2014.
– New mortgage loans decreased basically across all age group and only increase (7% increase) in the age group for those under 25.
– Elasticity of the Edmonton Housing Market. Edmonton has a great ability (one of the most capable in the country) to respond to an increased demand for housing. When unsold inventory rises new home construction falls.
The Edmonton Journal
If you have any further questions or would like to discuss what this means for you and your real estate investment please do not hesitate to contact me anytime!
Realtor® Owner Manager
Realty Executives Focus