If housing is a harbinger of a city’s economy, Edmonton could be in trouble.
Residential land sales in the Alberta capital dropped 57 per cent last year from 2016 and “are tracking close” to 2017 levels so far in 2018.
Sales of multi-family rental building buildings through the first three months of this year, meanwhile, have plunged 74 per cent from the record high set in the first quarter of 2017, according to the Edmonton Flash Report from Altus Group.
The land and apartment building sales reflect the current malaise in the Edmonton residential sector.
The average price of homes in the Edmonton region was virtually unchanged in May compared to May 2017, but sales dropped slightly, new figures show.
The Edmonton region saw 1,776 properties sold through the Multiple Listing Service in May, down 3.6 per cent from one year earlier, reports the Realtors Association of Edmonton.
The average sales price for all residential properties was $377,139, down 0.5 per cent from May 2017. This includes single-family houses, at $442,348, up 0.4 per cent in the past year; condominiums, down 3.9 per cent in the past year to $241,571; and townhouses, where prices were virtually unchanged from May 2017, at $346,800.
Edmonton’s rental apartment vacancy rate, pegged at 7 per cent in October of last year by Canada Mortgage and Housing Corp. (CMHC), is forecast to drop to 6.2 per cent this year.
“Due to high vacancy rates, landlords were forced to offer discounts and incentives to fill their units. This trend will start to end this year. Things might be a little unsteady until 2019, but they will improve,” said a report from Braden Equities, a large Edmonton property management firm, which is forecasting lower vacancy rates.
The slumping demand for residential land mirrors a downturn in new housing starts. In the first quarter, total Edmonton region housing starts were down nearly 20 per cent from a year earlier, at 1,739 units, according to CMHC.