Edmonton’s Luxury Real Estate Market Surges with 18% Growth

Edmonton’s luxury real estate market has experienced a remarkable surge, leading the country’s largest cities with an impressive 18 percent increase in resales of homes priced at $1 million or more. According to statistics from the Realtors Association of Edmonton, there were 187 transactions in the luxury segment during the first half of 2023, marking the highest activity levels seen in the past five years.

Several factors contribute to this growth. A significant driver is the heightened demand in the non-luxury market, where prices have risen due to intense competition among buyers. Overall, resales in Edmonton increased by 3.5 percent year over year, with the average home price climbing nearly 8 percent to $439,700.

Comparative Growth in Major Markets

Edmonton’s luxury market not only outperforms its local counterparts but also shows resilience against challenges faced by other major cities. The Sotheby’s International Realty Canada’s Mid-Year State of Luxury Report highlights a stark contrast in luxury sales among Canadian cities. For instance, Toronto has seen a 28 percent decline in luxury sales, while Vancouver’s numbers have plummeted by 51 percent. Calgary has experienced modest growth at 3 percent, balanced by supply and demand dynamics, whereas Montreal’s luxury market stands out with a 26 percent increase.

Notably, Edmonton’s entry-level price point for luxury real estate is set at $1 million, providing buyers with more value compared to the higher thresholds in Toronto and Vancouver, which start at around $4 million.

Trends in New Construction and Local Demand

The custom-built home market in Edmonton has emerged as a particularly vibrant segment. According to John Carter, broker and owner of Re/Max River City, many builders are opting to list properties on the market only after they are fully completed. This strategy has led to strong sales, with some homes being sold even before the final finishing stages, allowing buyers to customize certain aspects.

Carter notes that a significant portion of buyers in this segment are local families seeking larger homes, with an increasing number coming from out of province. The local market is thriving as move-up buyers recognize the value in selling their existing homes, allowing them to enter the luxury market more comfortably.

Jeremy Amyotte, a realtor specializing in Edmonton’s luxury market, explains that the increase in home prices generally has a trickle-up effect. He points out, “Prices, in general, have gone up across the market, which has a trickle-up effect with homeowners.”

Despite rising prices, Amyotte observes a parallel trend where luxury resale homes are increasingly competitive in pricing compared to new builds. “Resales are finally catching up with pricing in the new luxury market, but it still holds true that the really high-priced listings for resales sell for a lot less than the cost to build a similar new home,” he states.

The continued strength of new builds in the luxury segment reflects a robust level of disposable income within the city. “People are still building, which speaks to the level of disposable income in the city,” says Amyotte. “There is a lot of money to be spent.”

In summary, Edmonton’s luxury real estate market is thriving, spurred by local demand and advantageous pricing compared to other major Canadian cities. As the city continues to attract buyers and builders alike, it is poised to maintain its upward trajectory in the luxury segment.