Downtown Edmonton seeing faster development in rentals over housing

Downtown Edmonton seeing faster development in rentals over housing

Downtown Edmonton seeing faster development in rentals over housing

Developers with projects in downtown Edmonton would rather focus on rentals than on housing, according to a new market report by Altus Group.

This has become especially apparent over the last 12 months or so, Altus VP of product management Matthew Boukall said in an interview with Global News.

“What seems to be coinciding at the start of this year and the back half of last year is that the sales have been weaker. So we have seen a drop off in overall sales volume, and this is kind of encouraging developers to consider it more than they were in the past,” Boukall explained.

“What’s happening is developers who may have gone to market with the intention to build condominiums are finding that pre-sales are a little bit more challenging to get, but there’s quite a bit more certainty from a rental perspective so they’re shifting into that tenure.”

The Altus report indicated that new multi-family home sales trended downward in 2018, with a further decline in early 2019.

“The excess inventory situation in the new condominium apartment sector has deteriorated again in the past year,” Altus stated, adding that this accompanied a sharp downturn in home-buying intentions this spring.

“Buyers under 35 years – who are mostly first-time buyers – accounted for about half of Edmonton home sales,” the report explained. “About one-fifth of recent first-time buyers used RRSP funds as the primary source of their down payment.”

Per data from Canada Mortgage and Housing Corporation, first-half housing starts in the market stood at 3,961, compared to the 3,800 during the same period last year. The average price through June was at $546,000, considerably higher than the $535,000 a year ago.