‘Good luck to the buyers and hallelujah to the sellers’

It’s no secret that Edmonton’ resale real estate market favours buyers amid high demand and rising prices. Yet the experience is very different even among buyers, say local realtors.

“It can range based on the individual buyers,” says Jessica Tanner, realtor with eXp Realty in Edmonton.

Most first-time buyers are working toward getting the minimum down payment of five per cent of the purchase price, she adds.

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“Sometimes, we see larger down payments coming … with parents or grandparents helping their kids.”

Move-up buyers — also sellers — are in a much more fortuitous position, leading to a dual experience in the Edmonton market.

“It’s really good luck to the buyers, and hallelujah to the sellers,” Tanner adds. That said, a recent study by national realty firm Zoocasa, examining the benefits of larger down payments, suggests that more money is obviously better for buyers.

Furthermore, it shows that down payment dollars still go further here than other large cities — though Edmonton’s stature as a bastion of affordability is slipping somewhat.

A $50,000 down payment on the average priced home — about $431,000 (as of Dec. 31) in Edmonton — covers about 12 per cent of the purchase price. And the monthly mortgage payment would be about $2,045. That ranked the city among the middle of the pack of cities with lower average home prices.

The sum goes furthest in Thunder Bay, where the average price is about $282,000. There, $50,000 covers nearly 18 per cent of the price, with a mortgage of about $1,240 a month.

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Calgary is the largest city included in the $50,000 payment, given that in larger cities the amount is not enough to even cover 5 per cent of the average price of a home.

In Calgary, where the average price is about $624,000, $50,000 is an eight per cent down payment. In turn, a mortgage payment would be $3,104 a month.

The study then notched up the down payments to $100,000, $150,000, $200,000 and $250,000, sums that would suffice as down payments in larger centres like Toronto.

In Greater Toronto, $100,000 is nearly 10 per cent of average price of about $1.04 million with a mortgage payment of $5,091.

With $250,000 in hand, a buyer would have more than 24 per cent of the price and a mortgage payment of $4,115.

In contrast, an Edmonton buyer with $250,000 to put down on a home would have more than 58 per cent of the cost paid. And the mortgage payment would be $943 a month.

“Whether you’re a local or moving here, there is still a lot of value in the real estate market here,” says Dave Ozubko, realtor with Real Brokers in Edmonton.

Yet the market is becoming challenging for first-time buyers by the day as high demand pushes prices higher. Realtors of Association of Edmonton statistics from Jan. 31 show the average price had increased about one per cent over the month to about $438,000, and up nearly 10 per cent year over year.

“First-time home buyers, with residential home pricing having gone up so much, have to work harder and smarter to get to five per cent,” Ozubko says.

Be it first-time or move-up buyer, Tanner suggests individuals have their “ducks in a row” regarding financing heading into the busy spring market.

“If they get into the market and don’t have pre-approval for a mortgage, they are likely going to miss out on the house they want.”

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