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While young professionals are renting downtown, they tend to turn to the suburbs to buy homes.
Young professionals from out of town and downsizers are most interested in downtown area living. Photo by Ian Kucerak /Postmedia
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The great migration that saw rising demand for single-family detached homes in suburban and rural communities has come to an end in major centers with buyers flocking to apartment living in city centres, a new study suggests.
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Yet the trend is not emerging as clearly in the Edmonton market, local realtors argue.
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“Condos can be hard to sell in our downtown and urban markets,” says realtor Ron Dickson, senior vice-president at Sotheby’s International Realty Canada in Edmonton.
Calgary-based Bode, which offers buyers and sellers online tools to transact real estate without the need for a real estate agent, recently published the study in question.
It pointed to declining sales for single-family detached homes and rising demand for apartment condominiums in major centers in Western Canada, Edmonton included.
“The trend is partly due to apartments on average being lower priced, making them more affordable amid inflation and rising interest rates,” says Robert Price, chief executive officer of Bode.
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Looking at average monthly sales over the last four years, apartment sales in Edmonton for August were indeed 21 per cent higher than the average.
By comparison, sales for single-family detached homes were down seven per cent in August on average relative to the past four years.
What the data may indicate, besides the relative affordability of condominium apartments versus detached homes, is a return to urban living among Edmonton buyers, who are now more comfortable with the lifestyle as pandemic concerns recede, Price notes.
“Edmonton is seeing a similar trend to Calgary but less strong,” Price says, adding Calgary apartment sales in Calgary were up 95 per cent over the four-year average.
Yet local realtors do not see the numbers showing rising demand for urban living.
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“Our market is very different from Toronto, Vancouver and even Calgary for that matter,” Dickson says.
Realtor Jenn McPhillamey with Re/Max River City agrees, noting renewed interest in downtown among buyers has yet to emerge in the city.
She points to several obstacles among buyers looking downtown from a “lack of shopping options” to street crime. McPhillamey, lives downtown herself, noting that here “building doesn’t have visitor parking and if my overnight guests choose street parking, they risk getting their car windows broken.”
Still, MLS data shows the apartment segment in downtown and Oliver area have seen the most transactions year to date of all Edmonton areas, with 132 sales and 189 respectively.
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That is partly a result of those communities having the largest inventory of apartment condominiums, McPhillamey says.
Year-over-year sales, however, are down three per cent in Oliver and 13 per cent downtown, whereas sales in most other areas for the apartment segment are rising.
Dickson says more young professionals are returning to urban areas.
“But they often prefer to rent and plan to eventually purchase a single-family detached home in the suburbs when they are ready to buy.”
Some demographics are driving sales in central areas, though. These include young professionals from Toronto and Vancouver moving to Edmonton for work, who are used to the urban apartment condominium lifestyle. As well, retirees from central neighborhoods like Glenora are downsizing to nearby condominiums in Oliver, he adds.
What’s more, another tailwind is now emerging that could drive demand for living in more central communities, McPhillamey adds.
“Now that more people are working in the office full-time, and students are back in school, traffic feels horrible.”
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