Personal Finance

Advantage shifts to real estate buyers in Edmonton!

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  • Sep 23rd, 2007 3:31 am
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Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
Hellfire wrote: Hmm what do you guys think, I can get a new townhouse, around 1200 sqft, 2 bedroom each with attached full bathrooms, double attached garage, hardwood floors on the main floor, stainless steel appliances located in terwillegar towne and it faces a small but nice green area so there is lots of space in the front of the place (back of course is quite close to the next set).

Price is $355,000 all in.
Wait for it to come down below $300K.
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
ullyeus wrote: That statement could have easily been tossed out there 2 even 4 years ago...hasn't happened yet and the city of Edmonton is still expecting to get some massive population increases over the next few years.

Either way, in 2 years I will have saved $25,000 in rent so for me to really "lose" money it would have to drop somewhat substantially...which I don't see happening.
If the U.S. really does enter a recession the price of oil and other commodities will come down, hurting the Alberta economy. Not to mention less capital will be invested by American oil companies. I'm not so optimistic about continued growth in Edmonton, at least not in mid-term.

Also, would you really save $25,000 in rent over 2 years? That's $1041/mo. On a $200,000 mortgage the interest for the first couple months would be over $900/mo. Would your rent be close to $2000/mo?
Deal Fanatic
User avatar
Apr 6, 2003
8451 posts
16 upvotes
Thalo wrote: If the U.S. really does enter a recession the price of oil and other commodities will come down, hurting the Alberta economy. Not to mention less capital will be invested by American oil companies. I'm not so optimistic about continued growth in Edmonton, at least not in mid-term.

Also, would you really save $25,000 in rent over 2 years? That's $1041/mo. On a $200,000 mortgage the interest for the first couple months would be over $900/mo. Would your rent be close to $2000/mo?
True enough, I was looking at about $1100 rent a month compared to the $1000 I pay now for my mortgage. It was a decision I had to make, hopefully I won't take a bath...and if I can make some money in the process that's great.

I notice you mentioned "mid-term" rather than short or long...and I agree with you...long term real estate I think will always be a good investment...short term...next 2 years...I am fairly confident we won't see any big dives....but 3-10 years....I'm on your side.
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Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
I was thinking in the long term Alberta is pretty well set, at least until renewable energy fully replaces fossil fuel energy. That could be 50-100 years from now though. In the short-term we're also okay because oil will be over $80 for at least a little while. If the U.S. does enter a recession though (and I'm a strong believer that they won't) it will drag down energy and commodity prices (or they may remain the same while the $US loses even more value) over the next couple years and U.S. investment into the oil patch will all but disappear, at least for a couple of years.

The problem with house prices in Edmonton is just that they are very dependent on how the oil industry does. It's not a normal real estate economy where you can buy a property any time and as long as you hold it for 5 years or so you will come out with a gain. I would feel much safer buying a house in Toronto, even Vancouver, where house prices are high but not that much higher than their historical inflation-adjusted averages. Edmonton is one of the most over-priced real estate markets in Canada, with house prices nowhere near their historical averages, not even anywhere near an inflation-adjusted value of house prices during the last couple oil-booms.

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