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Edmonton Real Estate Market

There are a lot of units to absorb in the Downtown/Oliver with over 400 listed on MLS and I would bet at least that many not listed or currently being rented at or near a loss to cover carrying costs. Pair that with a slew of new projects bringing new rental options on stream and a few condo projects and it will be a struggle to get these moved, sold. Fundamentals might be improving but the gap to other markets and ground needed to be made up is considerable.

I have three friends trying to sell their condos in Downtown/Oliver, with 2/3 pulling them and renting them as they literally had no interest. These were in buildings less than 15yrs old and relatively modern units.

The two people I know who have sold in the last 6-12 months took 50-100k hits on their units to get them sold as they had built houses and were in a pickle. One of those was in the Icon II.

Until we have TFW back, a more significant impact from our post-secondary institutions from out of region/country and a continued improvement in our economic outlook we will continue to lag other markets.
 
Every single developer, financier and agent/broker in the core I speak with have real concerns over demand for condos in the core and how there is literally ZERO demand right now. Certainly this will improve but we have a climb ahead of us and at the moment it is quite bleak.
 
If you price units properly, they sell quickly. The problem in a declining price environment over the last 5 years, is that people believe their property is worth more than the market.
 
IanO said:
There are a lot of units to absorb in the Downtown/Oliver with over 400 listed on MLS and I would bet at least that many not listed or currently being rented at or near a loss to cover carrying costs. Pair that with a slew of new projects bringing new rental options on stream and a few condo projects and it will be a struggle to get these moved, sold. Fundamentals might be improving but the gap to other markets and ground needed to be made up is considerable.

I have three friends trying to sell their condos in Downtown/Oliver, with 2/3 pulling them and renting them as they literally had no interest. These were in buildings less than 15yrs old and relatively modern units.

The two people I know who have sold in the last 6-12 months took 50-100k hits on their units to get them sold as they had built houses and were in a pickle. One of those was in the Icon II.

Until we have TFW back, a more significant impact from our post-secondary institutions from out of region/country and a continued improvement in our economic outlook we will continue to lag other markets.
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I’ve heard the same sentiment from other realtors….even though I dislike realtors . Btw, AB’s share of the Fed allotment of the TFW’s is 200,000…..so one can surmise that a majority of these new rentals are going to be aimed at them…..
 
I remember 6-7 years ago I thought downtown condos were a steal.

Today, with close to Canada's highest average incomes, we have the least expensive downtown residential real estate of all the big cities in Canada. And in fact the prices have declined rather than increased. There seems to be two paths forward: either this is a bizarre and lucky lull before prices make a major correction upward, returning to trendline and Canadian average, or...prices keep falling for whatever reason... in the second scenario, we'll soon be in the really weird place where a condo will cost less than a truck or higher end SUV. This is in the centre of a major city in the G7 with booming economy, ample employment opportunities, full welfare state and healthcare. Really a bizarre outcome and I hope economists are studying this!
 
occidentalcapital said:
I remember 6-7 years ago I thought downtown condos were a steal.

Today, with close to Canada's highest average incomes, we have the least expensive downtown residential real estate of all the big cities in Canada. And in fact the prices have declined rather than increased. There seems to be two paths forward: either this is a bizarre and lucky lull before prices make a major correction upward, returning to trendline and Canadian average, or...prices keep falling for whatever reason... in the second scenario, we'll soon be in the really weird place where a condo will cost less than a truck or higher end SUV. This is in the centre of a major city in the G7 with booming economy, ample employment opportunities, full welfare state and healthcare. Really a bizarre outcome and I hope economists are studying this!
Click to expand...
I am!
My Master's thesis will talk about Edmonton's urban development and the general economics of the city
 
occidentalcapital said:
I remember 6-7 years ago I thought downtown condos were a steal.

Today, with close to Canada's highest average incomes, we have the least expensive downtown residential real estate of all the big cities in Canada. And in fact the prices have declined rather than increased. There seems to be two paths forward: either this is a bizarre and lucky lull before prices make a major correction upward, returning to trendline and Canadian average, or...prices keep falling for whatever reason... in the second scenario, we'll soon be in the really weird place where a condo will cost less than a truck or higher end SUV. This is in the centre of a major city in the G7 with booming economy, ample employment opportunities, full welfare state and healthcare. Really a bizarre outcome and I hope economists are studying this!
Click to expand...

Climate

Lack of investors

Opportunity Cost
 
IanO said:
Climate

Lack of investors

Opportunity Cost
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See my previous comment re booming economy, ample employment opportunities, good quality of life.

These might normally drive the three factors you mention.

The question remains of "why"? Let's get to root causes, not just surface analysis. I suspect there's something in YEG's real estate/development industry that is different from other places. Or something unique but as-yet-unidentified in the way the City operates, in provincial policies or perhaps to do with immigration.?
 
occidentalcapital said:
I remember 6-7 years ago I thought downtown condos were a steal.

Today, with close to Canada's highest average incomes, we have the least expensive downtown residential real estate of all the big cities in Canada. And in fact the prices have declined rather than increased. There seems to be two paths forward: either this is a bizarre and lucky lull before prices make a major correction upward, returning to trendline and Canadian average, or...prices keep falling for whatever reason... in the second scenario, we'll soon be in the really weird place where a condo will cost less than a truck or higher end SUV. This is in the centre of a major city in the G7 with booming economy, ample employment opportunities, full welfare state and healthcare. Really a bizarre outcome and I hope economists are studying this!
Click to expand...
It really is an incredible damnation that in a time that capital could not be cheaper that there's no one with a long term investment schedule seeing any grand opportunity here. It kind of reminds me of NYC in the 70s but to a way lesser extent.

At the end of the day, they aren't building anymore new big cities here in Canada, but population is set to steadily increase via immigration, who often like to live in urban areas. They can't all fit in TO, MTL and Van.
 
IanO said:
Climate

Lack of investors

Opportunity Cost
Click to expand...

Climate is kind of a myth. Edmonton gets cold a few weeks out of the year and I would argue the winters are more pleasant than what I experience here in the lower mainland.

Low prices have to do with (in my opinion) an under-diversified economy as well as all the problems that come along with it.
 
nv96 said:
It really is an incredible damnation that in a time that capital could not be cheaper that there's no one with a long term investment schedule seeing any grand opportunity here. It kind of reminds me of NYC in the 70s but to a way lesser extent.

At the end of the day, they aren't building anymore new big cities here in Canada, but population is set to steadily increase via immigration, who often like to live in urban areas. They can't all fit in TO, MTL and Van.
Click to expand...
Disagree - institutional money is here (e.g. large investors are buying up apartments in droves). The issue I was speaking of was the condo market (mom and pop investors).
 
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