Oilers99
Active Member
if developers don't make money on projects, projects stop fast.
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Edmonton Real Estate Market
- Thread starter Daveography
- Start date
if developers don't make money on projects, projects stop fast.
policyenthusiast
Senior Member
It can, definitely. But the profitability for developers aren't just decided by rental prices, considerations are also made for the development charges (Ontario DCCs average almost 10x higher than Edmontons), land acquisition costs, availability of labour and approval processes. Edmonton is extremely competitive on all of these fronts.
If a home in Edmonton costs 100k to build and the rent yields 100$ per month, and a home in Ontario costs 500k to build and the yield is $500 per month, the cost recovery time is the same. Using actual 2025 numbers, here's that principle in action:
- Edmonton:
- Build cost: $515,000
- Rent: $1,450/month
- Recovery time: ~355 months ≈ 29.6 years
- Regina:
- Build cost: $450,000
- Rent: $1,370/month
- Recovery time: ~328 months ≈ 27.4 years
- Toronto:
- Build cost: $1,000,000
- Rent: $2,500/month
- Recovery time: ~400 months ≈ 33.3 years
Oilers99
Active Member
Trust me when I say this, developer margin is VERY thin in Edmonton and when margins are that thin it makes them difficult to finance.
policyenthusiast
Senior Member
IanO
Superstar
An old friend is a partner there, curious to learn more.
policyenthusiast
Senior Member
If you wouldn't mind keeping us posted, I'm incredibly curious as well.
Oilers99
Active Member
Decided to close up, as per my note above they weren’t making enough return contrary to what everyone thinks about greenfield development, it is not easy to make money. They did not go bankrupt or anything but decided not to continue and finished out their inventory.
IanO
Superstar
How does Edmonton have a rental glut in the midst of a housing crisis?
Stats shows Edmonton rentals are available, and landlords are offering huge incentives. Why when all we hear about is a shortage of housing?
edmontonjournal.com
policyenthusiast
Senior Member
I'm shocked that they interviewed so many nonprofits and still didn't get anyone pointing out that the rental "glut" in Edmonton is not city-wide. It's in specific neighbourhoods and especially Downtown. Were I smarter with GIS, I would make a heat map.How does Edmonton have a rental glut in the midst of a housing crisis?
Stats shows Edmonton rentals are available, and landlords are offering huge incentives. Why when all we hear about is a shortage of housing?
archited
Senior Member
^ This is where intelligent forecasting by developers comes into play.
SarcasticMarmot
Active Member
Paywalled, but I can guess. Likely there are lots of market rate rentals, there is very little at the bottom of the market. The increase in housing costs has not been felt equally at all levels, the cheaper units have all but disappeared. Housing for folks/families making minimum wage, on income support, or disability supports is almost impossible to find. Especially large units for large low income families. But I can find a 2 bedroom for 2k really easily.How does Edmonton have a rental glut in the midst of a housing crisis?
Stats shows Edmonton rentals are available, and landlords are offering huge incentives. Why when all we hear about is a shortage of housing?
MacLac
Senior Member
Ian, please clarify your “rage bait” over this article….lol.How does Edmonton have a rental glut in the midst of a housing crisis?
Stats shows Edmonton rentals are available, and landlords are offering huge incentives. Why when all we hear about is a shortage of housing?
Is it the poor journalism that is the Edm Journal? Or the story itself, is it false?
David A
Senior Member
Maybe I missed it, but I didn't see any reference to the actual vacancy rate in this article, just mostly anecdotal comments about increasing incentives to rent which given some larger projects recently completed may not be a surprise as they want to fill their new buildings as soon as possible.
Yes, I suppose if the building trend keeps up and if fewer people move here, there could be a glut, but that is a couple of ifs and a could. Maybe the Journal headline writers missed the word "possible future" glut in their headline, their headlines have really become very lazy, sloppy and misleading.
Kosy123
Senior Member
CMHC vacancy rates had downtown at around 3-5%, so it's not really a glut? Sure we got an influx of new projects with hundreds of units, but to call that a glut sounds weird. Falcon, Peak and Switch are quite full and it's just the Parks with its higher price points and being the last major one so far to open that has a large number of vacant units.
policyenthusiast
Senior Member
Peterson's Ashleigh defies Vancouver condo slowdown with ample amenities
Sales for a three-building Peterson Group condo development in Vancouver remain steady in a slow market because of the project's boutique features, its vice-president of residential projects Barrett Sprowson suggests.
Unlike most low-rise condo projects, it will pack in amenities more often seen in highrises, including an entertaining room with a kitchen, a co-working space and community garden plots, Sprowson told RENX Homes.
At a time when sales statistics remain very low - October condo sales in Vancouver plunged by 23.1 per cent compared to last year - the expanded package of amenities has made Ashleigh Oakridge a standout to end-user buyers, Sprowson said. It has been enough of a pre-sale success for Peterson to forge ahead with the project.