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Edmonton home prices going up: CMHC

Blog by Sara Kalke | February 20th, 2011

The latest news from CMHC shows they predict home prices in Edmonton are going to rise by 2.26% in 2012.  As this should just keep up with inflation, the headline should really read: Edmonton home prices stable with inflation, but that wouldn't be an eye-grabbing story now, would it?  Good news that CMHC predicts a stable market for Edmonton.

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Edmonton home prices going up: CMHC

2012 should usher in record levels with 2.26% increase

 EDMONTON - Average MLS home prices in the Edmonton region will increase slightly in 2011, but price gains will pick up in 2012 to record levels, says a Canada Mortgage and Housing Corp. forecast released Thursday.

The CMHC’s first-quarter housing market outlook projects the average Multiple Listing Service price in 2011 for the Edmonton census metropolitan area will be $331,500 — an increase of about 0.8 per cent from 2010 when it was $328,803.

But the price will rise 2.26 per cent in 2012 to $339,000, CMHC said.

“Buyers’ market conditions in most Alberta markets will inhibit resale price gains in early 2011,” the federal agency said.

“Month-to-month price gains will occur in 2011 as market conditions firm, but will amount only to a fractional increase on an annual basis.”

It said the outlook for annual price growth is stronger in 2012.

“Supply and demand will be more balanced, generating price growth of over two per cent and lifting the annual average price above the record set in 2007.”

For MLS sales, CMHC predicts a buyers’ market will continue to slow transactions in Alberta into early 2011.

“A higher level of net migration in 2011 will support demand, as will low interest rates. Rising incomes and employment will also encourage home buying.”

CMHC said resales in the province will grow modestly in 2012, as the market feels the effect of higher interest rates.

Edmonton-area MLS sales will remain flat at 16,500 in 2011 and climb to 17,200 in 2012, CMHC forecasts.

In the new-home sector, the agency predicts single-detached builders in the province will remain cautious in early 2011 and wait for presales to pick up before significantly increasing starts.

“Market conditions that currently favour the buyer will transition toward balance in 2011 as new-home inventory is depleted and competition from the resale market abates.

“Balanced market conditions and rising wages will encourage new home buying in 2012, providing a lift to new construction by around eight per cent (in Alberta),” according to the forecast.

Edmonton-region total housing starts in 2011 are forecast at 9,600 starts, down slightly from 9,959 in 2010. But in 2012, there will be 10,500 starts, CMHC said.



Read more: http://www.edmontonjournal.com/business/Edmonton+home+prices+going+CMHC/4303139/story.html#ixzz1EUMLsHaY