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Residential real estate: Hard times expected for condo market

Edmonton's condo market is expected to come up against some difficult times, according to a real estate expert. In terms of residential real estate in Alberta, the condo sector has always been a pretty strong contender, but is apparently on life support in the Edmonton area according to the expert who recently spoke to a panel of developers. In fact, the man said that an investor market is basically nonexistent in the area, and condos are mainly purchased by first time purchasers or those who are downsizing.

Condo prices are expected to continue to decline. Realtors are blaming the likely losses partly on the extra burden purchasers will face with new federally imposed stress tests on mortgage loans. This test is to ensure that even though a purchaser may get a lower than prime interest rate on a mortgage, that he or she would still be able to carry the loan should his or her interest rate increase, so it must be proved that a loan could, in fact, be carried at the prime interest rate set by the Bank of Canada.

This also affects new builds to a degree. Purchasers could lay down a deposit on a unit in a building that could take forever to actually come to fruition. The speaker said the Edmonton area never really rallied from the condo buying frenzy in 2006 and 2007. When prices rose dramatically, people raced to put deposits on units for fear of further escalating prices.

The residential real estate market is a volatile one. But many Alberta residents still choose condominium living over any other. With these types of changes happening the market, buyers and sellers may fare better getting the advice of a real estate lawyer who knows what is current in real estate legislation. Getting prudent advice may be the wisest thing to do before signing on any dotted line.

Source:, "Edmonton faces tough new-condo market, panelist tells real estate meeting", Gordon Kent, Jan. 16, 2018

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