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Edmonton Real Estate Market

Downtown Edmonton office vacancies see developer calling for action
A building on the corner of Jasper Avenue and 109 Street is undergoing a transformation.

“We were very aggressive,” explains George Schluessel of ProCura Real Estate Services as he talks about WSP Place, a 12-storey building undergoing a multimillion-dollar renovation.

“I think that the location speaks for itself, having the LRT [right there],” Schluessel says.

The work commenced after the developer secured a lead tenant.
In the last several months, there have been big changes in downtown Edmonton. Two new office towers opened and a third remains under construction.

As tenants moved, older spaces have been vacated. The musical chairs, coupled with the economic downturn, has made it more difficult to fill the vacuum.

According to one real estate-leasing firm, the downtown office vacancy rate is above 12 per cent.

“Changes have to come fast and quick,” warns Schluessel, who is worried some landlords may turn to lower rents to entice tenants; something which could result in lower building values.
Sales of million-dollar Edmonton properties sets five-year record in first quarter
More million-dollar Edmonton homes have sold in the first quarter of 2017 than in the same period over the past four years, showing a glimpse — however tiny — that the province’s economy might be starting to feel a little less sluggish.

In the first three months of this year, 33 properties sold for $1 million or more in the city and the surrounding area, easily topping last year’s 20 sales and well above the previous years’ sales of 19 in 2015, 28 in 2014 and 23 in 2013.

The highest selling price of those properties was more than $3 million, the most expensive condo sold for $1.15 million and the most expensive duplex or row house sold for $975,000.

In delivering the Realtors Association of Edmonton’s first-quarter report Tuesday, chairperson James Mabey was cautious not to overstate the importance of the big-ticket sales, but added it is a healthy indicator of a real estate market about to move into its two busiest months.
4 downtown Edmonton office towers sold for $160M less than their value 7 years ago
In March, a single firm sold four downtown office towers facing vacancy problems at steep discounts in Alberta’s capital city.

As new towers are built in Edmonton’s core — in part, thanks to ICE District and related development — some older office buildings have uncertain futures.

“We have a thin office market in Edmonton,” Brian Gettel of real estate research and database firm The Network, said. “The new buildings coming in have really hurt the old Class A buildings.”

Last month, HSBC Bank Place on 101 Street sold for $35 million. Enbridge Place on 104 Street sold for $25 million. The HSBC building on 106 Street went for just over $12 million. The Milner Building just off Jasper Avenue at 104 Street sold for $7.5 million.

Combined, the four buildings dropped in value by more than $160 million in less than a decade.
Edmonton Home Prices Remain Relatively Flat in First Quarter of 2017
EDMONTON, April 18, 2017 /CNW/ - According to the Royal LePage House Price Survey1 released today, the aggregate2 price of a home in Edmonton remained relatively flat in the first quarter of 2017, increasing 0.3 per cent year-over-year to $381,733.

When broken out by housing type, the aggregate price of a two-storey home rose by 1.3 per cent year-over-year to $422,848. During the same period, the aggregate price of a bungalow saw a slight decline of 0.7 per cent year-over-year to $366,236, while the price of a condo dropped 2.1 per cent this year over last to $236,254.

"While home prices across Edmonton remain subdued by the recent economic downturn, optimism is returning to the market as commodity prices and employment opportunities continue to stabilize," said Tom Shearer, broker and owner, Royal LePage Noralta. "In the latter half of the quarter, the region experienced an uptick in demand and sales activity, as prospective homebuyers began to see the light at the end of the tunnel and sought to take advantage of currently depressed home values before they rebound."

Nationally, Canada's residential real estate market saw substantial price growth in the first quarter of 2017, increasing 12.6 per cent year-over-year to $574,103. The price of a two-storey home rose 13.9 per cent year-over-year to $681,728, and the price of a bungalow increased 11.0 per cent to $490,018. During the same period, the price of a condominium increased 8.9 per cent to $372,638.

While the majority of housing markets in Canada posted modest gains, price appreciation across much of Ontario significantly outpaced the rest of the country. Meanwhile, the pace of year-over-year home price appreciation in Greater Vancouver was noticeably lower than the historic highs witnessed in 2016.

"For the first time in several years, real estate markets in Vancouver and Toronto are headed in opposite directions," said Phil Soper, President and CEO, Royal LePage. "The Vancouver market stalled, as confused consumers took to the sidelines after a series of uncoordinated moves by all three levels of government. With its housing shortage becoming more acute, Toronto easily stepped forward to assume the title of Canada's most overheated real estate market."

Significant home price appreciation, caused by market dynamics similar to those that have driven housing activity in the Greater Toronto Area, is being seen across the entire "Golden Horseshoe" region of south-central Ontario, and as far away as Windsor and London in southwestern Ontario. In fact, the torrid pace of home price appreciation in much of Ontario contributed almost half of the national aggregate home price increase in the first quarter, with the rest of Canada appreciating by a healthy, but much lower, 6.4 per cent year-over-year when excluding all Ontario-based regions.

"The overall Canadian market is healthier in 2017 than it has been in years, yet the downside risks are greater too," concluded Soper. "Our economy, which has recovered nicely from the 2014 oil crisis, is sadly dependent on moves by an unpredictable U.S. federal government and can be swayed by unforeseen global events, such as fallout from Europe's restructuring. Still, housing activity is strong and prices are rising at a healthy mid-single-digit rate across the land. The trend in Alberta, Quebec and Atlantic Canada is particularly encouraging. Our concerns with the state of Canadian real estate begin and end in Toronto and Vancouver."

About the Royal LePage House Price SurveyThe Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, Brookfield RPS, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePageServing Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of over 17,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

For more information

1 Powered by Brookfield RPS
2 Aggregate prices are calculated via a weighted average of the median values of homes for reported property types in the regions surveyed

SOURCE Royal LePage Real Estate Services

For further information: Eddie Tabakman, Kaiser Lachance Communications, 647-680-8316,
One of the largest property developers in Alberta is in creditor protection after losing $67.3 million in the past three years following the oil downturn and troubles south of the border.

Walton International Group Inc. and numerous related companies were granted protection from creditors last week by a Calgary judge, according to documents filed by court-appointed monitor Ernst & Young. This gives Walton time to restructure and resolve its debt problems.

The Calgary-based developer administers about 43,000 hectares of land in North America, including 15 land development projects in Alberta and Ontario, and six in the U.S., according to an affidavit by chief executive William K. Doherty.

The company's website lists three current Calgary developments — SkyView Ranch, Cornerstone and Point Trotter — and nine Edmonton developments.

One of Alberta's largest land companies seeks court protection following string of losses
Walton International Group Inc. and numerous related companies that form part of an organization administering 105,000 acres of land for development projects across North America — including Edmonton — has received creditor protection.

A Calgary judge granted the protection last week giving time for Walton International, the main Canadian operating entity, and about three dozen other investment, development and management companies to restructure under the Companies’ Creditors Arrangement Act.

These applicants are part of Calgary-based Walton Group, made up of hundreds of trusts, corporations and partnerships in Canada, the U.S. and Germany, according to documents filed by monitor Ernst & Young.

The privately owned firm has thousands of investors who have bought corporate bonds or purchased units in partnerships that either develop land or hold vacant property until it can be sold.

The nine Edmonton developments listed on the company’s website include the jointly-owned 250-acre Henday Industrial Park, new homes in the northeast McConachie neighbourhood and the west end community of Hawks Ridge at Big Lake.
Edmonton real estate sale prices continue to inch upwards, condos see biggest rise
Property sale prices continue to inch up in the Edmonton region marking a “strong start” to the spring buying season, according to new real estate numbers.

Realtors Association of Edmonton data released Tuesday shows single-family home average price increased in April 2017 to $439,438, up 0.07 per cent compared to March 2017 and up 0.03 per cent relative to April 2016.

The big gain, however, was in the condominium market.

In April 2017, the average price was $257,740, an increase of 6.23 per cent over March 2017 and an increase of 2.32 per cent compared to the same period last year.

The average price of duplexes and row houses also increased, to $357,815, an increase of 2.58 per cent over March 2017 and 4.97 per cent higher than April 2016.
I guess Brad Lamb's assessment of the Edmonton Condo market as being the second strongest in Canada bears merit. He's got two on the boards (Jasper House and North)... expect more to be announced shortly.
Edmonton home prices steadily rise, show latest real estate numbers
Home prices continue to inch up in Edmonton’s now stable real estate market, according to second-quarter figures.

“For sellers, prices and sales are stable,” James Mabey, Realtors Association of Edmonton chairman, said as the latest numbers were released Thursday. “For buyers, there is some room to be discerning.”

An anticipated increase in interest rates coupled with current market conditions makes it an attractive time to buy or sell a home, he said.

Average sale prices for single-family homes in Edmonton rose to $453,735, an increase of 2.91 per cent compared to May 2017 and up 4.37 per cent relative to June 2016.

And average sale prices for condominiums showed the largest increase. They rose to $260,084 in June 2017, an increase of 3.69 per cent compared to May 2017, but a decrease of 0.66 per cent compared to June 2016.
Edmonton housing market makes a turn for the better: Royal LePage
Edmonton’s housing market began to pull itself out of a slump during the second quarter of 2017, according to numbers from the Royal LePage house price survey, although condo numbers slid slightly.

Year-over-year, the aggregate price of a home in Edmonton rose 3.8 per cent to $387,989. Two-storey homes saw the biggest jump at five per cent, to $449,090. Bungalow numbers rose 3.7 per cent to $376,498 while condominium numbers slid 2.3 per cent to $234,697.

“With prices having relatively stabilized, people aren’t looking over their shoulders as much anymore,” Tom Shearer, a Royal LePage Noralta Real Estate broker, said in a news release. “Instead, they are coming into the market in order to capitalize on slightly depressed home values.”

Shearer said that although people are still able to take their time while making a purchase, homes in Edmonton at certain price points have begun to see multiple offers, promoting more aggressive bidding. He said sales activity has been surging in some neighbourhoods.

Royal LePage expects Edmonton home prices will continue to see modest gains through the end of 2017. The company is forecasting prices will grow by 2.5 per cent year-over-year.
New provincial regulations released Monday would allow Edmonton to impose higher taxes on speculators and other commercial property owners who leave land sitting vacant.

That’s a win for Edmonton officials, who have been lobbying for the change. It’s a move that would create what one city lawyer previously called “one of the most powerful tax tools that exist” in the fight to clean up derelict properties.

The new set of regulations also includes a provision that would let cities charge small businesses 75 per cent less than the regular non-residential rate on their taxes.

The new batch of regulations — out for public comment until Sept. 22 — gives the fine detail before the 2016 amendments to the Municipal Government Act can finally take effect. That document is like a constitution for Alberta cities, governing what they can and can’t do.

“Any flexibility cities have to compel revitalization of unused or underused commercial sites is important to promoting vibrant and walkable neighbourhoods,” Coun. Michael Walters said.

Edmonton already has incentives — grants available to help businesses revitalize in key business zones. That’s the carrot, this is the stick.
New report picks Edmonton as top place in Alberta for real estate investment
Edmonton’s stable economy and affordable housing help make it Alberta’s top spot to invest in housing, according to a report released Monday by the Real Estate Investment Network.

“It’s more of a diversified economy than Calgary, which has been more of an on-off tap,” says the network’s senior analyst, Don Campbell, who has provided analysis on Canada’s real estate markets for more than 20 years.

“This report is designed to talk about the next five-year window. During those five years, Edmonton is poised to outperform in the housing market compared to the rest of the (Alberta) market, but we don’t expect to see those 20 per cent increases that became normalized a decade ago.”

The average monthly rent for a single-bedroom apartment was recently pegged at $910, down almost 10 per cent from a year ago and much lower than other major Canadian cities, the report said.

One reason is that tenants are leaving smaller spaces to share bigger homes with partners or roommates, typical of the higher volatility normally seen in the demand for one-bedroom, studio and micro-suites.

Falling rent prices and rising vacancies indicate Edmonton is in the middle of a slump phase that is a good time to buy housing in advance of an eventual recovery, the report said.
Edmonton real estate market looking stronger next year, reports indicate
Two reports on Edmonton’s residential and commercial property industry are painting a rosier picture of the market next year.

The city’s backlog of unsold new suburban homes is down from last winter and the market could start to tighten in 2018, figures from a real estate consulting firm show.

There was slightly less than two years’ worth of housing available in new subdivisions over the summer, a drop from the 2.3-year oversupply on hand at the beginning of the year, according to data Intelligence House released Tuesday.

“That’s put the market in a (balance) … In my opinion, balanced markets are always good. We don’t want an oversupplied market that hurts the builders or skyrocketing markets that hurt consumers,” company owner and partner Alex Ruffini said in an interview.

“That means if you really want to buy that kind of product, you still have options.”

As in so much with real estate, location is key. Home supplies are considered relatively high in Edmonton’s northwest, northeast and west sectors, but with only 1.28 years of supply the popular south sector is constrained.

There were 8,358 vacant lots available in the third quarter of the year, compared to 9,687 lots for the same period in 2016.
‘Growing concern’ about overbuilding of homes in Edmonton: CMHC
The Canada Mortgage and Housing Corporation (CMHC) says new data suggests the spectre of overbuilding in Alberta is becoming very real.

“There is low evidence of overbuilding overall at the national level, but there are growing concerns surrounding overbuilding in Calgary, Edmonton and St. John’s,” the CMHC said in a news release on Thursday.

The CMHC said while Alberta’s gradual recovery from the 2014 oil price crash is likely to see more people come to Alberta and help the province’s housing markets, overbuilding is “expected to put downward pressure on new housing construction.”

In its fourth-quarter housing market assessment for Edmonton, the CMHC said its concerns about overbuilding were mainly based on the number of unsold row housing combined with rising rental apartment vacancy rates since October 2015.


The Canada Mortgage and Housing Corporation says new data suggests the spectre of overbuilding in Alberta is becoming very real.

“Evidence of overbuilding in the Edmonton housing market increased from moderate to high as imbalances in both the ownership and rental markets were detected,” said Brent Weimer, CMHC’s principal in market analysis.

“The inventory of completed but unsold units, mainly concentrated in the apartment sector, has now moved above the level indicating overbuilding.”

Overall, however, the CMHC’s assessment of Edmonton found the city’s housing market only faces a “moderate degree of vulnerability,” the same as in the previous quarter.

'Overbuilding' has made Edmonton's housing market more vulnerable, says CMHC
Edmonton is one of three cities in Canada where a surplus of new housing is becoming a problem, the Canada Housing and Mortgage Corporation has found.

Two quarterly reports released Thursday by the CMHC show more housing units have been built than are needed in Edmonton, Calgary and St. John's, N.L.

The CMHC Housing Assessment said "evidence of overbuilding" went from moderate to high in the Edmonton market in the past quarter.
A building boom that started before the recession in 2015 is largely to blame, said Brent Weimer, CMHC's principal in market analysis for Edmonton.

"Large projects, apartment buildings, have a very long lead-lag time," he said. "So the planning process, the construction process, the completion and then the occupancy takes several years sometimes."

A lot of construction that began two or three years ago is now approaching completion, while demand has dipped, he said.

"We have a lot of competition in the rental market," he said. "We also have a large number of condo apartments just sitting on the market, just trying to find a buyer."