Alberta Condo Market Update: Summer 2020
It would be an understatement to say that 2020 has been an unusual year, and the current real estate forecast is a reflection of the unprecedented circumstances we’ve all been experiencing. The onset of the COVID-19 pandemic resulted in an economic domino effect, increasing unemployment rates while decreasing household incomes, residential construction activity, and property sales.
To put it simply, Canada is experiencing a record-breaking recession and the recovery process will be anything but immediate.
The Alberta real estate market, specifically, has been hard-hit by COVID-19, with residential sales being 55 percent lower in the first quarter of 2020 than they were during the same period in 2019.
But despite the significant economic fallout we’ve all witnessed during the first half of 2020, there are some signs of positive movement— particularly with regards to the Alberta condo market.
So, what can potential buyers and condo owners expect for the remainder of the summer?
Let’s take a closer look.
Here is Our Summer Condo Real Estate Forecast for Alberta
1. Construction Cool Down
Experts predict that construction projects in the Calgary area will decrease between 43 per cent to 64 per cent in 2020, with a similar trajectory being predicted for Edmonton as well.
This will result in an increased amount of pressure for developers to sell off existing completed properties before investing in new builds.
Last month (June of 2020), there were more than 7,900 unsold properties available in the Edmonton area and more than 6,200 in the Calgary region.
It is our prediction that until the demand for existing properties rebounds, the Alberta real estate market will not be able to support new or ongoing construction projects.
2. Cost-Friendly Condo Listings
Market downturns mean lower unit prices. For potential homeowners, this is one of the condo trends in Alberta to be excited about.
If you have been keeping an eye on the Alberta condo market for awhile in hopes of purchasing your next property, this may be the ideal time to make the move, as prices will likely begin to rise in the coming months (provided that the province doesn’t experience a second wave of COVID-19).
3. The “Surban” Lifestyle
Across Canada, suburbs are becoming increasingly urban-ized, with coffee shops, 24-hour fitness facilities, transit stations, and other high-demand amenities being developed at a rapid rate. This trend has been coined the “surban” shift— and the Alberta condo market is not immune to it.
With the baby boomer generation no longer making up the majority of the household consumer population, there is now a higher demand for balanced lifestyles. Millennials and Gen Xers value being able to live, work, and play all within close proximity to home (or, at the very least, close enough to enjoy an easy commute).
Thus, another of our condo market predictions for 2020 and beyond is an increase in demand for condos in suburban communities that offer the modern amenities younger potential buyers are most drawn to.
Even the most trusted analysts are unable to predict the future of Canada’s real estate market with certainty at this time.
Many Canadians have relied upon mortgage payment deferrals and other government benefits to remain afloat financially since the emergence of COVID-19. It is difficult to foretell how the real estate sector will be affected once these supports and programs end.
Furthermore, the coronavirus pandemic has created mass behavioral changes that could become the “new normal” long after COVID-19 is no longer a major health concern. Senior citizens, for example, may opt to remain in their homes instead of transitioning into assisted living facilities, due to the fear of living in close quarters with other residents should another pandemic occur.
Then there’s the questions of whether or not employees will return to offices, warehouses, and other corporate properties. If they don’t, the commercial market will be impacted significantly.
But one thing is for certain— we’ll continue to do our research and keep our valued readers informed.
Do you reside in a condo property managed by our team? Do you have questions related to the Alberta real estate market or upcoming condo trends? We encourage you to get in contact with us. If we don’t have the answer to your inquiry, we’ll point you in the right direction!