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Real estate transactions: Alberta homeowners waiting to sell

It seems homeowners in Wild Rose Country who have been thinking of putting their homes on the market are moving like sloths. Real estate transactions in Alberta have slowed down since prospective vendors are waiting to see what the market will do in the coming months. This has caused a shortage of inventory and has kept prices higher than normal and made it difficult for the market to adjust, according to realtors.

Sales volumes are at a low in most of Western Canada, in fact. While prices of inventory in the rest of the country have dropped, Alberta prices have remained higher than what would be considered normal. Analysts say homeowners sitting on the fence about selling are partly to blame for prices and lack of inventory. Homeowners are reluctant to list their homes for what they feel they believe is fair market value, but are still focusing on those times when prices were inflated and homes were spilling over on the market.

Edmonton leads the way in Alberta real estate transactions

The capital of Wild Rose Country is currently leading the way in real estate investments. Edmonton is Alberta's reigning leader in real estate transactions lately, according to a recent report on residential property deals in the province. The report suggests Edmonton is ahead in sales since it is entering a market recovery period, which makes prices more attractive for homebuyers.

Market conditions are also favourable for those wishing to purchase single family homes as investments -- holding on to them and renting them out instead of living in them. The capital has also seen increased job growth in the last several months and many sectors -- including technology -- are becoming much more healthy. The climate for job growth is great since Edmonton is the seat of health care and post secondary education in Alberta.

Commercial real estate: Second Amazon centre to open in Alberta

Amazon is expanding its presence in Wild Rose Country. The massive corporation is nearly halfway to the completion mark of its commercial real estate venture in Alberta -- its second fulfillment centre in Leduc County. The centre will be close to Edmonton International Airport and will be able to handle and process larger items like bicycles, equipment and furniture. Amazon's first fulfillment centre in the province is located in Calgary.

The one-million square foot building now employs about 100 construction workers and that number will increase to about 250 as construction nears its end. Once open, about 600 Albertans will be employed by the Amazon centre. The company says as customer demands increase, the number of employees is likely to increase as well.

The good news, bad news of commercial real estate in Canada

There are always two sides to a coin. The same can be said for commercial real estate in Canada -- the good news and the no so good news, according to a well-known real estate forecaster. On a positive note, the office sector across most parts of the country has been rallying -- with the exception of Alberta's two major cities -- which continue to have high corporate vacancy rates, but the economy is expected to stabilize.

The retail real estate market it doing better over a larger spectrum in Canada. Again, urban centres in Alberta aren't doing as well since empty office buildings don't drive traffic to nearby shops, which end up suffering. And rents for these retail spaces continue to escalate without the usual shoppers frequenting these establishments.

Some office buildings turned into residential real estate units

Some landlords are stepping up to the plate to try to help the economy in Wild Rose Country. Some property owners in Alberta are taking commercial properties like office buildings and turning them into residential real estate units -- particularly in the Calgary area. When agencies or companies leave these buildings, some landlords are opting to shell out big bucks to refurbish them into apartment or condo units. It's a way landlords are getting through the rough spots of a sickly oil industry which affects all areas of the economy.

In fact, it was actually costing landlords more to keep struggling commercial tenants, rather than letting them leave and turning these buildings into residential units. After the oil price crash in 2014-2016, about 20% of Calgary's downtown office spaces have remained vacant -- higher than most urban areas of the country. It was a hard adjustment for landlords to make since they were used to the vacancy rate in boom times of about 1%.

Residential real estate: Canmore leading the way in Alberta

There is one municipality in Wild Rose Country to which people are turning for rest, relaxation and recreation. Residential real estate sales in Canmore have continued on an upswing despite the recent downturn in overall provincial sales. When it comes to recreational home sales, Canmore is leading the pack. Recent statistics show that the average price of a home in Alberta is expected to rise to more than $838,000 -- an increase of more than 10% and that hike is largely attributed to expected sales in the mountain community.

Buyers to Canmore are coming from all areas -- from around the country and internationally. The Alberta Real Estate Association (AREA) says things are starting to turn around when it comes to real estate sales, albeit slowly. With lower prices and the general belief that the economy is rebounding, the province is seeing more demand and growth in the market.

Real estate transactions: How much downpayment is enough?

Having a minimum downpayment to buy a home is necessary. But, would it benefit Alberta residents in their real estate transactions to have as much saved as possible when purchasing property? More importantly, should people postpone buying until they have as much saved as possible? There are financial considerations for buying sooner and for buying later and much has to do with saving for eventual retirement.

Having more for a downpayment means carrying less of a mortgage and extra cash on hand. However, some of that money can be put into the pot for retirement savings. Putting money toward a downpayment may mean a person can't begin to save for retirement until he or she is in his or her 30s or beyond. But there is also the issue of having to pay mortgage insurance on a 10% downpayment.

Alberta real estate transactions: Taking advantage of the PRE

When an individual sells a property, there are some tax breaks of which he or she can take advantage. When it comes to real estate transactions in Alberta, residents can claim a principal residence exemption (PRE) on the sale of their properties. But there are some things they should know before doing so such as being aware of any changes to the Canada Revenue Agency's requirements. 

Homeowners are given an exemption from the capital gain they earned on the sale of a principal property. In order to take advantage of the PRE, the property must be the principal residence of the owner. The principal residence is defined as being lived in by the owner, spouse and/or children, must be a housing unit and known as the owner's primary residence. A cottage or cabin can also qualify in many instances.

Residential real estate: Alberta on an economic upswing

Albertans are feeling positive about the future. There are many things that fuel increases in residential real estate sales and one of them is a positive economic outlook. For many in Alberta, particularly in Cow Town, growth in many sectors is reason for celebration. Analysts say the next five years are looking bright for infrastructure in general and for the real estate industry, in particular. 

Although the economy is slow in recovering, it is expected to continue to be on the upswing through 2024. Much of that is due to the expected and continued increase of Alberta crude oil prices. Also, investment in residential builds is expected to outpace nonresidential in the next five years. The Calgary area is expected to generate nearly $9 million in investment within the next few years.

Real estate transactions: Legal cannabis affecting market

It's been more than half a year since the country legalized cannabis. Making cannabis legal has had a positive effect on real estate transactions in Canada -- both agriculturally and commercially. It has also had an effect on real estate prices in general, according to a recent study. Smaller communities are benefiting from the increased demand for agricultural lands.

Canada's top cannabis producers are veering away from urban centres where land sells at a premium. Industrial buildings that have sat vacant are being leased for fulfilling orders connected to the cannabis industry. The retail sector has also been a part of the chain reaction the cannabis industry has caused in the market. 

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