Higher prices can dampen enthusiasm for home sales

Edmonton’s real estate market slowed over the summer after an intense spring of sales

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The buying frenzy seen last spring is like yesterday (maybe), according to a survey examining buyer enthusiasm.

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“We’ve really seen a dramatic change,” says Penelope Graham, senior content editor at Zoocasa, an online real estate company that conducted the recent survey of 1,400 Canadians, a follow-up to a previous survey from the start of the year. ‘year.

The previous survey measured buyer attitudes in February, as price and sales growth in all markets in Canada, including Edmonton, approached their highs in early spring.

“Now that we’re no longer locked in and things have changed dramatically both in terms of the pandemic and the housing market, we wanted to check out how that feeling of housing has changed.” Graham said, adding that the latest survey revealed a big change in the perspective of potential buyers in the market.

“There is a pretty big change in the way Canadians perceive low interest rates and their impact on the affordability and price of homes,” she says.

Here, the latest study found that about 34 percent of those polled disagreed that low interest rates make homeownership more affordable, an increase of 12 percentage points from the February survey.

“The other one that was really a huge number was whether low interest rates are driving up home prices, and 84.5% agreed with that statement.” Graham notes that this response is 32.5 percentage points higher than in the February poll.

Graham says the survey did not explore why respondents may now perceive low interest rates differently from what they were at the start of the year. One reason, however, could be that the pandemic market peaked in early spring and has since cooled.

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“Based on what we’ve seen in the past months, it really looks like March and April have been the peak of the pandemic market, and we’ve seen back-to-back months of market downturn for sales activity and nationwide price growth. “

Although the study does not include a regional data breakdown, the Edmonton market has shown signs of slowing down after setting record sales for the previous months, including June. Sales in July increased slightly from the same month last year to around 2%, but were down almost 19% from June of this year.

Prices also fell month over month in July by about 2%.

Edmonton Realtors Association president Tom Shearer said the market was “normalizing” and heading towards more historic seasonal norms, with summer activity declining compared to the generally busy spring market.

“I expect stable activity (for the rest of the year) with less price pressure than what we saw this spring.”

Graham says Alberta’s real estate market – while suffering many of the same effects of the pandemic – is more affordable than Toronto and Vancouver and, in turn, may be able to support more price and sales growth. long time.

“The Alberta market experienced softer conditions compared to Ontario and British Columbia before the pandemic,” she says. “But really, all markets have seen an unprecedented increase in average price growth during the pandemic and all have seen their sales increase.”

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