Edmonton Real Estate Blog

Well, it looks like we are going to have an early spring this year and the real estate market is reacting accordingly coming on strong early as well.

As of the morning there were 1,727 actives single family dwellings on the market in Edmonton proper on MLS, which is a slight increase from last week’s number of 1,669.  More and more people are putting their homes on the market on a daily basis.  This gives buyers more selection, but I am concerned that the increase in supply will start to surpass the demand at which point that will negatively affect valuations.

At this moment we are just fine.  The sales are increasing at a faster rate than the supply.  In the last 30 days there were 584 single family dwellings sold in Edmonton proper – an increase from last week’s number of 517.  More importantly, the listings to sales ratio is now below 3:1 at 2.96:1.  With that kind of ratio I expect to see valuations to start to increase immediately.  That is bad news for buyers and they will need to buy right away before prices rise again.

Please call me if you have any questions about this, or anything else related to Real Estate. I would love to help you out. (780) 634-8151

Serge Bourgoin founding and managing partner of Team Leading Edge at RE/MAX Elite

Team Leading Edge… Leading the way with extraordinary service

Edmonton’s ever improving economy continues to bolster residential real estate activity in the city. The number of homes sold in Edmonton is up 21 per cent to 884 units, while average price has largely stabilized at $314,783. Balanced market conditions have, for the most part, re-emerged in 2010. Values, still off peak 2007 levels, have hit a plateau, as buyers take advantage of opportunities at all price points.

The oversupply of listings available for sale throughout 2008 and 2009 has largely been absorbed, with inventory returning to more normal levels. Active listings now hover at 4,864, a decrease of 26 per cent from one year ago. While new listings have fallen off, the supply of homes listed for sale is adequate in most price ranges and neighbourhoods. First-time homebuyers continue to represent the lion’s share of activity in the marketplace, driving sales of homes priced from $300,000 to $350,000. Multiple offers are starting to occur, but they are the exception, rather than the rule. Move-up buyers have ramped up activity as well, spurred by exceptionally low interest rates. Condominiums have been moving steadily in recent months, but supply still exceeds demand.

A strong spring market is forecast for 2010, supported by a serious upswing in consumer confidence levels. Recent announcements regarding major investments in the oil sands have tremendous potential for Edmonton’s economic future. The provincial government is also co-operating with the major players in the oil industry to create a positive business climate and is expected to return to surplus budgets within three years. While there may be some skeptics in the audience, it’s hard to ignore the city’s growing optimism.

Active listings down in 81 per cent of markets in January

Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.

The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.

Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.

Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo (-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax- Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.

There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.

While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings-especially at the entry-level price point-experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.

The level of frustration is growing, as pent-up demand builds. For every successful offer, there are those that will walk away empty-handed. They’re thrust back into the buyer pool and the process starts all over again. Some buyers are upping the ante, while others are considering alternate housing options. Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.

Recent revisions to lending criteria will add fuel to the fire in the short term. Buyers considering a variable rate mortgage will step up their plans for homeownership in the next month or so just to get in under the wire. In the longer term, buyers will adjust, but move forward. Compromise has long been a reality-particularly in the larger centres. This simply means they may go smaller or further in their pursuits.

It’s been a 180 degree turnaround from this time last year. It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders. The vast majority of markets are now recovered and fully-evolved, with all segments working in tandem. At the luxury price point, activity was brisk in seventy-three per cent of centres surveyed, with momentum ramping up in the remainder. Opportunity exists in some areas, but the question is for how much longer?

Source: RE/MAX Market Trends 2010

This won’t hurt a bit, homebuyers.

The mortgage rule changes announced Tuesday by Financial Minister Jim Flaherty will weigh a bit on real estate speculators and heavily indebted people who want to fold their high-rate credit card debt into a lower-rate mortgage. But for rank and file homebuyers, the changes will barely be perceptible when they take effect on April 19.

“This should have a limited impact on what I see daily,” mortgage broker Peter Majthenyi said in an e-mail he fired off after Mr. Flaherty’s announcement. “I believe it’s more a message that ‘Big Brother’ is watching and cares.”

Olympics aside, the favourite Canadian diversion of the moment is to debate whether there is a bubble in the housing market. Those most worried about the housing market plunging have urged Mr. Flaherty to raise the minimum down payment for a home and reduce the maximum payback period.

But the 35-year amortization, favourite of first-time buyers across this land, remains. So does the 5-per-cent down payment, which is heavily relied upon in high-cost cities like Vancouver, Calgary and Toronto.

All the measures announced by Mr. Flaherty affect mortgages covered by government-backed mortgage insurance, where the buyer puts less than 20 per cent down. The key change for typical home buyers is that, regardless of what term or type of mortgage they choose, they’ll have to be able to afford the five-year rate.

This is a sensible way of building some slack into the system as we look ahead to a cycle of rising interest rates. If someone chooses a variable-rate mortgage, where the interest rate can be as low as 2 to 2.25 per cent today, they’ll have to be able to handle the payment at the current five-year rate. Right now, the posted rate at the big banks is 5.39 per cent.

You won’t have to actually make the higher payments required by the five-year mortgage. You’ll just have to theoretically be able to carry them and still remain within the limitations lenders set out on how much of your gross income can be consumed by debt (it’s 42 to 44 per cent, just so you know).

Mortgage brokers report that a lot of lenders were already ensuring clients could afford the payments on a three-year mortgage. So bumping up that up to a five-year term will only have a marginal effect.

“Are we going to see the odd borrower have to come up with more money or not buy they house they want? Absolutely,” Mr. Majthenyi said. “But will it have a dramatic effect? No.”

Another reason why the changes won’t be jarring is that a huge number of homebuyers are actually choosing five-year mortgages these days. A study issued by the Canadian Association of Accredited Mortgage Professionals last month showed that fixed-rate mortgages accounted for 86 per cent of mortgages in set up in 2009 and, of those, 70 per cent were for a five-year term.

People who borrow to buy investment properties to either flip for a quick profit or to generate income are also affected by Tuesday’s announcement. If you buy a property you’re not going to live in, then you’ll have to put down a minimum 20 per cent to qualify for mortgage insurance. That’s up from 5 per cent.

But Mr. Majthenyi said not all lenders even require clients to have mortgage insurance if they put 20 per cent down. He also said that stiff mortgage insurance premiums already discouraged people from putting 5 per cent down on an investment property.

“In my office of 10 brokers, I don’t think I know of one client we’ve processed on a high-ratio rental property,” he said.

The final mortgage change restricts the ability of existing homeowners to refinance their mortgages to take on more debt. The new ceiling is 90 per cent of the value of your home, compared to the current 95 per cent.

Mortgage broker Jas Grewal said one group that will be affected by this is recent buyers who made a small down payment and are struggling with high credit card balances and other debts. By folding these debts into their mortgage, they can reduce their interest rate from as high as 19 per cent down to something closer to 3 or 4 per cent.

“Let’s say you put 10 per cent down – if we go from 95 to 90 per cent, you’re not going to be able refinance,” Mr. Grewal said. “You’re going to have to wait until your house value goes up and gives you some equity.”

Source: Rob Carrick of the Globe and Mail (www.TheGlobeandMail.com)

TORONTO — Canada’s residential real estate market is expected to remain unusually strong through the first half of this year after a strong finish to 2009, according to a survey published Thursday by Royal LePage.

The Royal LePage analysis is consistent with other recent reports on the state of the Canadian real estate market, which has rebounded over the past 12 months after sales dried up in late 2008 and hit a multi-year low in January 2009.

The Canadian market’s sudden plunge was sparked by a credit crunch that originated in the U.S. housing and lending industries – eventually spreading globally, causing a worldwide recession in the late summer and early fall of 2009.

However, the Canadian real estate market has been much quicker to recover than its American counterpart, in part because of a more stable banking industry, historically low interest rates and improving consumer confidence.

Royal LePage executive Phil Soper says Canada’s real estate market enters 2010 with “considerable momentum from an unusually strong finish to the previous year.”

The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity to new highs, he said in a statement.

Royal LePage says house prices appreciated in late 2009, with fourth-quarter price averages higher than in the fourth quarter of 2008.

The average price of detached bungalows rose to $315,055 (up six per cent), the price of a standard two-storey home rose to $353,026 (up 5.2 per cent), and the price of a standard condominium rose to $205,756 (up 6.4 per cent).

Regions that saw the strongest declines during the recession are now showing marked gains. Those regions include Toronto and the Lower Mainland, B.C.

Vancouver, which is frequently Canada’s most expensive real estate market, experienced a particularly robust quarter, with home prices rising across all housing types surveyed.

“No other sector of the economy has been as highly affected by economic stimulus as housing,” said Soper.

“As consumer confidence has improved, Canadians have shown a lingering reluctance to acquire depreciating assets such as consumer durables, but have embraced the opportunity to invest in real property.”

Royal LePage estimates that Vancouver’s real estate prices will rise a further 7.2 per cent this year, although February may be soft because of the Olympic Winter Games that will be held in the city and nearby Whistler, B.C.

Detached bungalows in Vancouver sold for an average of $828,750 in the fourth quarter, up 11.4 per cent from the same period last year. Standard condominiums in Vancouver went up 11.8 per cent year-over-year to an average of $452,750. Prices of standard two-storey homes in Vancouver rose 9.6 per cent year-over-year, selling at $917,500.

In Toronto, the average price of a standard condo rose 2.9 per cent to $309,316, detached bungalows rose 9.9 per cent to $446,214 and standard detached homes increased 3.5 per cent to $564,175.

In Montreal, the average price of a detached bungalow rose to $245,125 (up 3.1 per cent; a condo increased to $216,667 (up 16 per cent) and a two-storey house increased 12.3 per cent from a year earlier to $345,789, Royal LePage said.

The Greater Montreal Real Estate Board reported Thursday that the number of sales last year increased 41,802, up three per cent from 2008. The median price of a single-family home was $235,000 last year, up four per cent from 2008.

“Although sales decreased the first four months of 2009, Montreal’s real estate market rebounded and finished the year on a positive note,” said Michel Beausejour, the Montreal board’s chief executive.

The group that represents Toronto-area realtors reported Wednesday that there were 87,308 transactions last year through the Multiple Listing Service, a 17 per cent increase over 2008.

In December, there were 5,541 sales in the Greater Toronto Area (average price $411,931), up from 2,577 sales in December 2008 (average price $361,415), according to the Toronto Real Estate Board.

The Toronto board also said the number of sales of existing homes rebounded in the latter half of 2009 after a slow start at the beginning of last year.

Royal LePage’s average price estimates for other Canadian cities include:

-St. John’s, N.L.: Detached bungalow, $217,167 (up 14.3 per cent); standard two-storey house $298,833 (up 14.1 per cent).

-Halifax: Detached bungalow, $238,000 (up 10.7 per cent); standard two-storey homes, $265,333 (up 1.8 per cent).

-Charlottetown: Detached bungalow, $160,000 (up 1.9 per cent); standard two-storey $195,000 (up 3.7 per cent).

-Saint John, N.B.: Detached bungalow, $228,000 (up 1.3 per cent); standard two-storey $299,000 (up 1.5 per cent).

-Moncton, N.B.: Detached bungalow, $152,300 in the fourth quarter (up 1.5 per cent); standard two-storey home, $131,000 (up 4.0 per cent)

-Fredericton: Detached bungalow, $182,000 (up 12.3 per cent); standard two-storey, $210,000 (unchanged).

-Ottawa: Detached bungalow, $332,417 (up 3.4 per cent); standard two-story home $331,917 (up 3.7 per cent).

-Winnipeg: Detached bungalow, $241,650 (up 9.9 per cent); standard two-storey home $275,500 (up 10 per cent).

-Edmonton: Detached bungalow, $299,286 (down 0.7 per cent); standard two-storey home, $340,557 (down 1.2 per cent)

-Calgary: Detached bungalow, $412,478 (up 0.5 per cent); standard two-storey home, $427,067 (up 2.3 per cent).

By David Paddon Copyright © 2010 The Canadian Press

Well I hope you all had a Happy Holiday!! Now it is time to start thinking about what might happen in the New Year. Current data that I use to forecast the market are skewed right now because of the holiday season so we will wait until we have new data next month to see where the market is going.

It seems the consensus that home values will go up in the New Year, but I don’t think that it will be as much as most people think.

Yes, there are parts of Canada that the market is really getting hot again – but that is only because their home values had dropped more than we had, and their economies were more depressed than what we had experienced here in Edmonton, and Alberta for that matter.

The recovery in the USA isn’t going as well as most people had hoped, and that will slow down any recovery we have here in Canada as they are our biggest trading partner.

I think we will more likely to see a 5% increase in home values as that would be more realistic. We might be able to get lucky and get up to 10%.

But this all could be brought to a halt or slow down as the finance minister is worried that Canadian people have taken on more debt than they ever have in the past. He is thinking about possibly making changes that will affect mortgages and real estate.

Some of the changes they are considering are raising the amount of down payment up from the current 5% to at least 10%. They are also talking about shortening the amortization period from the current 35 years. Another expectation is that the interest rates will be going up this year.

These factors will have a great impact on the ability for people to buy homes, especially for first time buyers. They will now have to wait longer to save for a down payment and they will now qualify for less of a home because of the lower amortization period.

The real estate cycle starts with the first time buyer. They need to get into the market so that everyone else can sell their home and move up into a bigger or more expensive home.

In my opinion if any of these changes are implemented you can expect the real estate market to slow down and curb the chances of valuations to go up.

So if you are a first time buyer I would advise you to do everything in your power to buy sooner than later. We might be able to help you with this process including helping you to get pre-approved with the lowest rates possible ( in many cases lower than the banks), and we can send you a first time buyer package.

To receive the package call Kate at my office at 780-643-8151 or send her an e-mail @ teamleadingedge@shaw.ca

Lets see what this month will give us and hopefully we will have a better indication as to what we can expect in this springs marketplace, and that is my two cents… Serge

Edmonton, January 5, 2010: Residential sales through the Edmonton Multiple Listing Service® were at the second highest level ever for December (after a record number of sales in 2006 of 1,074). Sales of single family homes, condominiums, duplexes and other residential property totalled 948 units for the month. Total sales of all types of real estate for December was 1,066, also a second place finish for monthly sales.

The price of residential property remained stable in December with single family homes dropping just  one third of a percent and condos increasing 5.4% to reverse the 2.5% drop in November. An average* priced single family property in the Edmonton area sold for $366,761 in December; down from $368,018 in November. The average price for a condo was $244,174; up from $231,684 the previous month. The all-residential average price at the end of December was $319,201.

“Strong year-end sales put a crown on a year that started slow but ended big,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “We entered 2009 with a global recession at our backs and a real estate meltdown to the south. However consumer confidence in Alberta started to return in the second quarter and the real estate market in Edmonton was the first place in the country to show signs of the recovery.”

There were 19,139 residential sales in 2009 with record setting sales in June and July after the slowest start since 1996. From September to December residential sales were just below record sales set in 2006.

Throughout the year the average single family sale prices varied from a low of $347,000 in February to $373,000 in July; a $26,000 or 7.5% spread. The average year-to-date value was $364,032. Condo prices varied within a 9% range from $227,000 in February to $247,000 in June. The average year-to-date price was $240,322.

There were 1,118 homes listed in December resulting in a sales-to-listing ratio of 85%. The average days-on-market was 50 days and total residential sales were valued at $302 million for the month. Overall, the MLS® System had total sales of all types of property of just under $7 billion in 2009 as compared to $6.6 billion in 2008.

“We predicted residential sales of 15,550 this year and exceeded it in early October,” said Ponde. “We anticipated that single family prices would end the year at $352,000 and condos would be at $222,500. We are pleased that the year ended up better than we had anticipated and look forward to the stable market continuing into the next decade.”

Source: REALTORS® Association of Edmonton

If you didn’t buy a house in July, the best time to buy may be running out, according to a new consumer-confidence survey.

The November Alberta consumer confidence index, released Saturday along with its sisteconomyer survey measuring business optimism by Leger Marketing and PricewaterhouseCoopers, show both groups expect continued economic recovery.

But while jobs will be more plentiful, consumers increasingly believe real estate will become more expensive in the near future.

The index of Albertans who believe buying a house in the near future is the best time to do so decreased to 147 in November, continuing its fall from a July peak of 164.

Survey questions in the study were used to produce index scores representing respondents’ confidence in a component of the economy. An index score above 100 represents an optimistic sentiment, and scores below 100 indicate pessimism.

“With signs of economic revival and potentially a real estate recovery, consumers may become less enthusiastic about purchasing a house in the future,” said David Bryan, an advisory partner at PriceWaterhouseCooper’s Edmonton office.

The overall consumer confidence index was 111, down slightly from 112 in September.

Consumers also continue to expect interest rates to rise as reflected by an index score of 63, steady from 65 in September.

Consumers’ optimism about the job market continues to increase. The future unemployment index improved for the fifth consecutive month to 106 in November, the report said. Confidence about employment crossed the 100 mark for the first time since May 2008.

“Overall, consumers are optimistic about the job market,” Bryan said. “Consumers continue to see these times as a good opportunity to buy homes and other major purchases, although to a lesser extent than in the previous quarter.”

But consumers remain conservative about major household purchases, with a November index score of 121, compared with 125 in September.

Meanwhile, businesses continue to become more optimistic about the economy: their overall confidence index rose for the fourth straight month to 109 in November.

In Alberta, 297 business leaders were surveyed in November, and 900 consumers were interviewed by phone. The margin of error is plus or minus 3.3 per cent, 19 times out of 20.

By Bill Mah, Edmonton Journal

The Canadian housing market is getting dangerously close to “bubble territory” and is likely headed for a correction in the second half of 2010, according to a top economist.

“We are certainly at risk of a full-blown bubble,” said BMO Nesbitt Burns deputy chief economist Doug Porter, who expects to see a “modest” market correction next year with prices taking a hit.

The extent of the correction depends on how much prices increase in the next six months, he said. After dropping at the start of the year, resale house prices have surpassed the peaks of the past year. Research by the bank to be released Wednesday says housing valuations are likely “richer than equity valuations” in the current market.

“The higher we climb, the bigger the risk of a correction,” Porter said.

He said characteristics of a bubble economy include speculative buying, a massive amount of credit on the market, and sales and prices of homes “going north without the economy tagging along.”

Cities such as Vancouver and Toronto, which have had significant activity, stand the most risk of a correction, he said. “You are seeing a lot of line ups at sales centres and speculative buying in those cities.”

Existing home sales rose for the third straight month in November, up 73 per cent from 2008, according to figures released Tuesday.

A total of 36,383 homes sold in November, according to the Canadian Real Estate Association. That figure is just under a percentage point short of equalling the November record for home sales set at the peak of 2007. The average price of a home was up 20 per cent year over year to $368,665.

In Toronto, sales hit 7,466, about double the total from last November, when the financial crisis set in.

The volatility means homebuyers continue to be nervous about the economy, according to a poll released Tuesday by Royal LePage of their 1,225 agents across Canada.

“This kind of unsustainable volatile market really creates uncertainty in people’s minds,” said Phil Soper, president and CEO of Royal LePage.

According to the poll, 38 per cent of Royal LePage agents say economic factors such as job security are the number one issue with buyers. Another 23 per cent said their clients fear they wouldn’t be able to get the price they wanted for their home, and 12 per cent said some customers are hesitant to sell because the market had not hit bottom. About 20 per cent said they had no concerns from clients.

Soper says that unlike the U.S., rapid price rises have been “a matter of weeks” during the second half of the year, compared with south of the border, where the bubble developed over more than four years.

“The market has a way of sorting through things and we hope it’s in a measured way. As affordability erodes one thing you will see is that more people won’t qualify for lending and activity will ease off,” said Soper.

Some good news for buyers is that the return of strong demand means that more sellers are returning to the market. Seasonally adjusted new listings rose 5 per cent on a month over month basis in November, the biggest monthly increase since January of last year.

Tony Wong
BUSINESS REPORTER

EDMONTON – More houses and condos will be built, more existing homes sold and it will be a little harder to find an apartment to rent next year.

And existing homes and rents are expected to cost more in 2010, a comprehensive new report on Edmonton’s housing market said Monday.

This strong rebound predicted for 2010 comes after housing starts in the Edmonton area hit bottom this year — the third straight year of decline, the Canada Mortgage and Housing Corp. said Monday.

Builders are on pace to begin construction on 5,000 homes, 24 per cent fewer than the year before, said the national housing agency’s Fall 2009 Housing Market Outlook for the Edmonton census metropolitan area.

It is the lowest level of activity for the region’s homebuilders since 1997, said the report, and follows a 56-per-cent decline in total housing starts in 2008.

“While single-detached construction has staged a modest recovery since the summer, a continued downturn in the multi-family sector will hold down this year’s numbers,” the report said.

For 2010, the agency expects continued growth in single-family detached homes and a moderate rebound in multiples, boosting total starts by 29 per cent to 6,450 units. While that would be a considerable improvement over this year, it compares with an average of more than 10,600 units started every year from 1999 to 2008.

For 2009, a new single-detached home in Edmonton will be an average of $535,000, up 4.5 per cent over 2008.

Still, the CMHC predicts the average price will soften in 2010 by 2.8 per cent to$520,000 because of a “lagged effect” of when homes are priced and when they are completed.

On the other hand, the agency forecasts pressure for higher negotiated selling prices in 2010 from builders who had cut their margins over the past year to clear inventory. “With better economic times ahead, land and labour costs as well as material prices such as lumber and concrete are expected to increase.”

In the resale market, the CMHC predicts residential Multiple Listing Service sales will increase this year by eight per cent to 18,750 units. Last year was the slowest for Realtors since 2003, with saw sales falling 15 per cent to 17,369 homes.

“Provided the economy and interest rates perform as expected, CMHC looks for the upward trend to remain in place during 2010,” the agency said. Total MLS sales are forecast to rise another 9.3 per cent to 20,500 homes in 2010, which would approach the level in 2007, which was the second-best year on record.

The average residential MLS price will end 2009 close to $322,000, down 3.3 per cent from the 2008 average.

A balanced market in 2010 is expected to translate into modest price gains all year, with the average resale price rising 3.4 per cent to about $333,000, CMHC said.

Home-ownership costs will likely rise in 2010 as mortgage rates are at rock bottom and prices set to increase, the agency added.

In rentals, apartment vacancy rates across Greater Edmonton will continue to trend up this year. “But landlords should see a turnaround in 2010, provided economic conditions improve,” the report said.

The vacancy rate for October was an estimated four per cent, compared to 2.4 per cent a year earlier. It was the highest fall vacancy rate since 2005.

Factors in dampening demand for rental apartments were rising unemployment, more demand for home ownership and a steady influx of condominium units.

The agency sees the rental vacancy rate falling to 3.5 per cent amid fewer new apartments and strengthening demand.

CMHC expects its fall survey to show rents largely unchanged from October 2008. “With vacancy rates starting to subside in 2010, property owners will be looking to raise rents to offset rising operating costs, in particular utilities and property taxes,” the report said.

A typical two-bedroom apartment will rent for nearly $1,070 by October 2010, up about $35 a month on average compared with October 2009.

By Bill Mah, edmontonjournal.com