Canada’s westernmost prairie province is experiencing unprecedented market activity. From urban cities to rural areas there’s something exciting for everybody in this province! If you’re searching for your next home, then Alberta may fit the bill as an ideal market for hopeful homebuyers. Here’s what’s you need to know if you’re currently thinking about purchasing a home in this province:
Home Sales Across Alberta
In Calgary, home sales have risen month to month, especially for detached and semi- detached homes. However, year over year sales have declined by 15 per cent reflecting the continued uncertainty in the market.
Despite these downward trends, favourable borrowing conditions may spark more activity in the Calgary real estate market despite other hurdles such as a hurt labor market and sluggish economy. With the average home price in Calgary expected to decrease over the next two years due to economic uncertainty, this may provide an opportunity for buyers with financing to scoop up their dream home. Although, home prices will ultimately depend on how supply and demand change as a result of fluctuations in the economy. For now, it is still too early to say if this demand is simply delayed spring homebuying activity trickling into the summer months.
Summer is heating up the Alberta housing market; especially in the south, sales are on the rise!
In the city of Lethbridge, statistics showed a 12 per cent increase in sales in the month of June further increasing to 16 per cent in July. This coincided with a recorded 206 sales in the city and an increase in listings of 250 year over year. Despite the pandemic, this is the strongest July the city of Lethbridge has had since 2006. Although, there will be some competition due to low inventory, showing a downward trend of 12.5% in July year over year. This doesn’t seem to be stopping buyers from scooping up homes in this southern market. Increased affordability and the availability of larger homes compared with other urban markets, in continuing to pull homebuyers to Lethbridge.
Changing consumer purchasing trends
A possible homebuying trend, some realtors have noticed a surge in buyers purchasing homes outside of major cities like Calgary and relocating to less densely populated areas in the province. The practice of social distancing is impacting homebuying preferences, with more people opting for small towns and rural destinations where the risk of disease spread is lessened. Jennifer Handley, mayor of Nanton, a small town south of Calgary, commented on this shifting preference for rural areas of Alberta in a recent news report:
“I think there is that appeal that we are a little bit isolated from what’s going on in the city…They felt, especially if they were living in a condo apartment and they wanted to sell their place there, come here and not be as close to people — and we’ve heard that story time and time again.”
- Jennifer Handley, Nanton mayor
Another driving factor is that people can work from home since remote working is still being encouraged by many employers. Some businesses are offering more flexible working environments such as work from home at least a few days a week, with a requirement of going to the office occasionally. This allows homebuyers considerably more flexibility when looking for a new home, no longer bound by the requirement of being in close proximity to the office. This explains the surge of families exploring quieter, more remote areas that traditionally only attracted retirees.
Since many people have been speculating how the COVID-19 pandemic will cause shifts in consumer behaviour – especially migratory and lifestyle patterns – this rural-bound trend will be one to keep an eye on in the coming months.
Lower Interest Rates
The Bank of Canada has lowered the benchmark interest rate in order to stimulate the economy. For now, they are holding the rate at 0.25%. For those who were concerned about mortgage payments, this could be an optimal time to engage in the Alberta real estate market. Lowered interest rates could encourage those who have job security and aren’t anxious about financial insecurity in the near future, to move or purchase a new home as a first-time buyer. However, for those who are unsure of their job situation in the months ahead, this could be a good time to sit tight until there is more security or stability in the provincial job market.
Alberta like other provinces across the country has faced challenges due to COVID-19. While the real estate market may have slowed down, there has also been opportunity for buyers who are open to making a purchase. With less market competition and an increase in listings flowing back into the market, this may be the perfect time to secure your dream home in Alberta.