In an interview with CBC News, portfolio manager Hilliard MacBeth said that the recent slowdown in Edmonton—with both median home prices and sales volume declining by 2 per cent year-over-year last month—does not necessarily indicate that the city will remain relatively stable and sedate forever.
“We're in second or third inning [in this recession],” according to MacBeth, who recently wrote When the Bubble Bursts: Surviving the Canadian Real Estate Crash.
Also, because the city’s real estate market has been going strong for almost two decades now, Edmontonians may believe the market will not be affected by downturns.
“People have been lulled into the idea that house prices always go up,” MacBeth warned.
The analyst recommended potential residents to consider rentals instead of purchases while they wait and see what happens to Edmonton. Aside from being a bargain in the city at present, renting would also allow households to save up larger amounts that they can use for their eventual mortgages.
A recent Environics Analytics study found that Alberta’s household net worth dropped by 0.7 per cent to $763,812 as a consequence of flagging petroleum prices.
“We saw the oil-based provinces, especially metro centres, really taking a beating relative to the rest of Canada. Those provinces are facing significant headwinds. They might not necessarily be in a recession, but they are definitely struggling,” the report noted.
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CMHC releases third quarter Housing Market Assessment
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With various expert predictions of a possible housing crash being at least twice as bad as the last four (on average), the Edmonton market is not prepared to address the impact of such a meltdown, according to an observer.