Edmonton house constructing has one other sturdy quarter of development

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The demand for condominiums in timber frame construction recorded the greatest increase with a turnover increase of 126 percent compared to the previous year

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Joel Schlesinger for the Edmonton Journal Multi-family prices are rising, with concrete apartments seeing the biggest jump of more than 10 percent to an average price of about $ 588,000. Multi-family prices are rising, with concrete apartments seeing the biggest jump of more than 10 percent to an average price of about $ 588,000. Photo by Ed Kaiser, file /Postal media

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New condominium and townhouse sales continued their hot streak during the pandemic, posting a fifth straight quarter of growth, a new report shows.

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Urban Analytics released its new multi-family condominium market valuation earlier this month for sale and pricing from April through June.

“It was just another great quarter,” said Jackson Cornelius, Alberta apartment building analyst for Urban Analytics. “We have increased well over 150 percent since the first quarter of 2020.”

A total of 450 sales in the new multi-family segment were made in the city in the second quarter of this year. That is 17 percent more than in the first quarter of 2021 and 62 percent more than in the second quarter of 2020.

The demand for condominiums in timber frame construction recorded the greatest increase with a turnover increase of 126 percent compared to the previous year.

City apartments also remained strong – up 10 percent – accounting for the largest share of revenue at 366 for the quarter, compared with 77 timber frame sales and just seven concrete units sold.

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The city’s southwest submarket continued to power the market with 174 total sales, or about 39 percent of all Edmonton sales. The Southeast was the next most active market for the quarter. Overall, the south side of the city accounted for 67 percent of sales activity, up from 56 percent in the first quarter of the year.

While sales demand growth has been impressive, Cornelius notes that the new condominium market has seen years of trouble as many developers move projects to purpose-built rentals. This has resulted in a decrease in the supply of new condominiums while demand has recovered and existing inventory has been depleted. As the report notes, new inventory was at its lowest level since the third quarter of 2018.

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Low inventory levels helped drive new home prices higher in all segments in the second quarter year over year.

Concrete housing saw the largest increase, more than 10 percent, to an average price of about $ 588,000; Timber frame homes grew about three percent to about $ 296,000, and the townhouse segment saw an increase of about 0.5 percent to about $ 309,000.

Cornelius adds that the market likely has plenty of room for growth, considering that new apartment buildings make up a small percentage of total sales, new and old, in the city.

“The demand is there,” he says, referring to almost 2,200 total sales across all segments in new and resale sales in July.

“The volume of transactions is in Edmonton, and it’s growing.”

Like the emerging market, the resale side of apartment and townhouses is also recovering from very low demand, says agent Bev Hasinoff of Liv Real Estate in Edmonton.

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“We are still seeing high inventory levels and sluggish sales in both condos and townhouses, although the latter are usually more desirable to buyers,” she says.

Townhomes are increasingly seen as a viable alternative to single-family homes for budget-conscious buyers, but Hasinoff adds that condominium fees remain a major obstacle for many potential buyers.

In order for the new multi-family and resale market to really take off, Edmonton needs greater migration between provinces and internationally, says Cornelius.

“I imagine this will likely happen within the next year,” he says, adding that the delta variant of COVID-19 calls into question the full reopening of the economy in the short term.

Nevertheless, the developers take note that further new project starts are planned in the coming months, says Cornelius. “There is a great opportunity to start new projects in Edmonton for townhouse products and wood frames.”

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