Edmonton ranked the best place to invest in real estate in Alberta | Edmonton Journal
For real estate investors seeking opportunity in Alberta, they can find no better place than Edmonton. According to an analyst behind a report ranking real estate investment opportunities in Alberta, the capital city is number one, even ahead of Calgary.
Jennifer Hunt is the vice-president of research for the Real Estate Investment Network (REIN), which publishes its Top Ten Alberta Towns and Cities every six months, including its most recent update in the spring.
Speaking to the Edmonton Journal recently, Hunt provided her most recent insights on why the city is expected to continue to lead the province when it comes to residential real estate investment.
Hunt says Edmonton — and Calgary — is ahead of many other municipalities in the economic cycle, with its real estate market now entering ‘recovery mode.’
That bodes well for investors who are planning to buy and hold a property for the long term. Conditions are also favourable for those seeking to buy and rent out a home, she notes.
“It’s certainly got the economic health and diversity,” she notes. As the seat of the provincial government, along with being a centre for post-secondary education and health care, Edmonton has many different drivers of job growth compared with other municipalities.
“It’s also becoming quite a tech hub, so all of these economic drivers make it not as reliant on oil.”
By comparison, Calgary’s economy has a much larger share of white-collar jobs related to oil and gas, which have been negatively affected by the downturn that began in late 2014 and still continues today.
Hunt says REIN’s ranking of cities in the province involves examining dozens of economic indicators, including job growth and GDP.
Overall indicators are positive for both Edmonton and Calgary. But the markets have suffered from inconsistency, experiencing “spikes” of optimism and “valleys” of negativity.
“The word I use to describe it … is a reverberation,” Hunt says. “The economic fundamentals all on their own would be fantastic, but when we layer in market influencers of politics and policy,” conditions become more volatile.
Chief among policies with a negative impact is the mortgage stress test — a nationwide regulation — that has made home ownership more costly for first-time buyers. Put in place by the federal government to deal with overheating markets in Toronto and Vancouver about two years ago, it did as intended in those metropolises. But it overcooled the struggling real estate market in Alberta, experiencing one of its worst slumps in decades.
This along with a number of other headwinds mean “the market is going to bounce around for quite some time until the economy starts to generate good jobs and, in turn, population growth,” she says.
Sustained job growth is now just getting started in the province, and that will eventually lead to population growth. In turn, that will drive the rental market that eventually translates into higher housing prices as more people seek to buy a home.
Hunt adds the expectation is within the next couple of years the market will rebound. Just expect plenty of stops and starts between now and then.
And that may be challenging for individuals just getting their feet wet, she adds.
“In a market like this, we are going to see these reverberations … and it can be very daunting.”
This content was originally published here.