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“People come here for work because they can actually afford a house,” says realtor Doug Smiliski, of Royal LePage Noralta Real Estate.
Among Canadian provinces, Alberta millennials were more likely to own a home than any other group at 65 percent. Photo by Ashley Fraser /Postmedia
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The secret is out: Edmonton is an affordable market for young buyers finding themselves locked out of other cities in Canada.
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“We’re seeing a lot of people moving to Edmonton because of the cost of living,” says Trisha Zimmerling, real estate agent with Royal LePage Noralta Real Estate.
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She notes the difference in price between Edmonton and larger markets like Toronto as a key driver.
Canadian Realtors Association data from July shows the average price of a home — all housing types combined — in Toronto was more than $1.1 million, and prices there have been on the decline since March.
By comparison, the average price of a single-family detached home in Edmonton was about $452,000 in July.
Relative affordability is one key reason millennial buyers — those ages 26 to 41 — are largely still seeking single-family homes in Edmonton despite rising prices during the pandemic while borrowing costs have shot up in the last few months with the Bank of Canada hiking its benchmark Rate 225 base points.
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“A lot of young buyers still want these homes … gravitating more toward newer neighborhoods where there are a lot of two-storey houses,” Zimmerling says.
Among them are a growing number of out-of-town buyers, a trend reflected in a recent survey by Royal LePage showing that while Canadian millennials remain optimistic about their ability to purchase a home, many feel they cannot afford a home in their market.
Among Canadian provinces, Alberta millennials were more likely to own a home than any other group at 65 per cent, compared with 57 per cent nationally. The percentage of young owners fell to 53 per cent in British Columbia and 54 per cent in Ontario.
Among major cities (Edmonton was not included in the survey), the number dropped to 49 per cent in Vancouver. Toronto’s share of millennial homeowners among respondents was 56 per cent. Calgary led the nation with 68 percent.
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Most notably, among those planning to buy or move up in the next five years, 43 per cent of Vancouver respondents believed they would have to relocate to another city. The figure was 45 per cent among Toronto respondents. Again, Calgary had the lowest percentage among cities at 26 per cent. In Montreal, the percentage was 38 per cent and 35 per cent in Ottawa.
Veteran Edmonton realtor Doug Smiliski says the survey points to “a bit of a rift going on right now” in Canada.
“I think things are happening so quickly for millennials that they haven’t had a chance to adjust,” says Smilski, also with Royal LePage Noralta Real Estate.
Rising borrowing costs have pushed many first-time buyers out of the market in other cities, he adds.
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Even in Edmonton this demographic is now compromising more than they had just a few months ago, looking to townhomes — as opposed to single-family detached homes — to get into the market before borrowing costs move even higher, he adds.
Although challenging, “interest rates are really just returning to normal,” Smilski says.
What’s more, the market should remain strong because it largely remains affordable — particularly for out-of-province millennials moving here for work, Zimmerling says.
“We may not have mountains or the ocean, but people come here for work because they can actually afford a house.”
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