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.