If you’re like me, when it comes to thinking about real estate, your touchstones are the super-charged markets in Toronto or Vancouver. In which case, you’ve probably already concluded that buying a home is out of reach.
Not unlike the market here in Toronto, you’re in need of a correction.
Reality elsewhere in the country is markedly different. In fact, there are a few pockets in which house prices have actually fallen in the past year — presenting some intriguing buying opportunities for anyone who is struggling to get onto the property ladder.
For example, instead of enduring insane bidding wars, you can find not-shabby-at-all digs in Edmonton, where homes spend an average of 48 days on the market.
So if you’re feeling priced out of your city, these are the housing markets — located for the most part in oil boomtowns — where you can find a discount right now.
At the height of the oil boom, young people flocked to Edmonton. (The average age is 35, making it one of Canada’s most youthful cities.) High-paying jobs and affordable housing meant a comfortable middle-class lifestyle was within reach.
But mass layoffs in the oil and gas sector beginning in 2014 forced many young families to pick up and move. The market hasn’t fully bounced back. According to Teranet-National Bank House Price Index, the average price of a home has fallen 2.16% in the past 12 months.
Broken down, the data show the average price of a single family home actually increased by a third of a percentage point, which works out to about $440,000. However, the total average was brought down by sagging prices in the condo and duplex markets (currently around $250,000 and $334,000, respectively).
Economists at the Royal Bank of Canada and the Conference Board of Canada think the city is about to turn a corner. Edmonton’s economy is forecasted to grow by 2.3% by the end of 2017, buoyed by a reenergized construction industry. This could help absorb some housing inventory, albeit at a restrained pace.
There are three traffic lights on Jason Yochim’s commute from a suburb in Saskatoon’s north end to his office on the outskirts of downtown. On average, he spends a total of 24 minutes in his car.
“Move out here, it'll add hours to your life,” he says. “The worst thing about Saskatoon is January.”
The city, according to Yochim, CEO of the Saskatoon Association of Realtors, offers the quality of life that’s hard to replicate anywhere else.
“[A budget of] $350,000 will certainly give you a lot of options,” he says.
On the economic side of things, the province’s resource-heavy economy is still recuperating from a crash in commodity prices. Fortunately, Saskatoon’s comparatively diversified economy insulated it from brunt of the downturn, says Yochim. Companies in the manufacturing, technology and farming sectors withstood the decline, which helped bolster the housing market.
The city hasn’t been totally immune from the recession: the year-to-date selling price of a home is down 2% and the median selling price also shrank by 5.7% ($335,000). Before the economy shifted, demand for multi-family condos and townhouses was on the rise, Yochim says, but now there’s no one to occupy them. “There are lots of brand new units completed, a lot to choose from.”
Some more reassuring news: the Conference Board of Canada’s outlook for Saskatchewan predicts the economy will grow by 2.5% this year, due in large part to forecasted increases in oil production.
Newfoundland and Labrador
Alright, this one isn't a city. But there's plenty of cities in the province that will offer buyers discounts this year according to experts.
Home prices in Newfoundland and Labrador have actually grown over the last year, edging up 1.1% to approximately $258,000. However, sales of detached homes fell precipitously, by 15.7%, and analysts say prices will follow. The Canadian Real Estate Association identified the maritime province as one of the provinces that will experience negative growth by the end of the year, one of the only provinces that will experience this. According to a report from RBC, the issues are “tough economic conditions and surging unemployment.”
Quebec City’s labour force is mostly comprised of well-heeled professionals, it boasts one the lowest unemployment rates in the country and its picturesque downtown draws herds of tourists each year.
Yet home prices have fallen 2.58% over the past year. One home stayed on the market for two years without any offers. What gives?
According to National Bank Senior Economist Matthieu Arseneau, the city’s population has declined sharply over the last three years. “As a result, there has been overbuilding and supply was above demand for some time,” he says.
However, the new-listing-to-sales ratio in May was at its lowest level since 2012, meaning the market is on its way to finding its equilibrium. “This should translate into home prices growing again over the next months,” Arseneau says.
This city in Northwestern Alberta, close to the British Columbia border, has long been a hub for workers in the forestry, oil and farming sectors. “You have some pretty well-off younger people in G.P. because work is so easy to get here,” says RE/MAX agent Brent North. But layoffs in the oil and gas industry put a damper on real estate (and also led to an historic spike in crime: Grand Prairie held the title of most dangerous city in Canada).
The average price of a home in May dropped 1.4% (approximately $310,000) from the same time last year. But agents like North are betting on an economic rebound due to the fact that Grand Prairie is situated on top of gargantuan oil reserves that have yet to be tapped.
“In my opinion, we are going to see the balanced market through to the spring of 2018. Then you're going to start to see prices start to rise,” says North.