The province of Alberta has long attracted people in search of a new career, the mountains, or just a change in lifestyle. And for the better part of the last two years, many Ontario and Quebec residents have been seeking affordability and more space in the Alberta real estate market. While the Alberta housing market is busier than usual, it’s still posting average prices well below that in larger provinces like Ontario, Quebec and British Columbia – a perfect (and affordable) destination for young professionals and first-time homebuyers to settle down.
Alberta Real Estate Stays Strong Despite Recent Slowdown
Across Canada, housing markets have been gradually moderating from the sky-high sales that dominated much of the last year. Driven mostly by the pandemic and its effects on day-to-day living, markets across Canada have been on fire and most have settled into a red-hot seller’s market.
Alberta real estate is following the same trend, however it is still outpacing activity typically seen in this provincial market.
At the end of September, there were 6,580 sales recorded across the province by the Alberta Real Estate Association (AREA), marking the best September since 2014. Compared to September 2020, this past month saw a nine-per-cent increase in unit sales. Leading the way for the province are the two largest cities – Calgary and Edmonton. Calgary registered 2,159 sales and Edmonton came in at 1,300; a 27-per-cent and one-per-cent year-over-year increase, respectively.
On a year-to-date basis, the province has logged 67,098 sales – an outstanding 62-per-cent increase over 2020. This year-over-year increase is largely credited to a strong first half of 2021.
With homes still selling at a fast pace across the province, it’s important to have an adequate influx of new listings. However, for the province as a whole, this is not the case. While some areas in Alberta, such as Red Deer and Fort McMurray, are seeing an increase in new homes being listed, the province in its entirety zeroed out with new listings. During September of 2021, 9,381 homes were listed for sale, on par with last year, exerting further upward pressure on prices in the Alberta real estate market.
Consistently high demand and a moderate number of new listings have yet again caused the average price of residential property in Alberta to move upwards. In fact, the average price of a home sold in September 2021 was $415,821, which is four per cent higher than this time last year. Leading the charge in terms of price increases is Red Deer, Alberta, which experienced a double-digit percentage increase over September 2020.
Even though housing prices continue to rise, the inventory of homes in Alberta is low – a trend that is mirrored in markets across Canada. With 12 per cent less inventory at the end of September 2021 compared to inventory levels a year ago, houses are hard to come by and plenty of prospective buyers are being shut out of the market.
In particular, Lethbridge and Medicine Hat are experiencing a depletion of inventory. Not only did Lethbridge see a five-per-cent dip in new listings in September, but the city saw overall inventory drop by 24 per cent. Medicine Hat was not far behind, with an 18-per-cent decline in overall inventory year-over-year, and a three-per-cent decline in new listings. Bucking the national trend, neither of these cities is experiencing a spike in home prices, with the average property price in both markets below the provincial average.
Will Alberta Continue to Shift Back into Balance?
With the Alberta real estate markets continuously in flux, the overall market has remained consistent in the province as a whole. With certain areas seeing an influx of new listings and others seeing a decrease in sales, there are hopes that Alberta will continue to shift toward more-neutral territory.
With conditions beginning to ease up, prices are no longer increasing at the same alarming rate as they were at this time last year. As we move closer to 2022, the Alberta housing market may naturally shift directions, as is typical of the cold Albertan winter.
Source: Alberta Real Estate Association
