The Battle of Edmonton Condos: New or Remodeled?
With all the marketing dollars spent by Edmonton condo developers on their new condo projects it’s hard not to love those shiny new condos. But what about the tried and tested downtown condominiums with solid upkeep and maintenance?
The River Vista in Edmonton
I’ll be the first to admit that visually, the exterior of Edmonton condos built in the 70’s and 80’s are uninspiring for the most part. The irony is that when you are inside your unit looking out, you don’t see your exterior, you see everyone else’s. All else being equal, I’m sure we would all like to have that “wow” factor when we walk up to our condo building, or better yet when our friends drive up to visit!
But is all else equal?
Let’s take a closer look at Edmonton downtown and Oliver condos; both newly built (or almost new) listings, and remodeled units listed for sale from buildings that are older. These two bedroom condos for sale downtown: RES A Email Large, were built in 2005 or newer. The median asking price for these condos is $411.62 / SqFt which is considerably more than market value. Buying a home or condo can be an emotional decision, especially for first time home buyers, and these buildings offer the style, colours, and finish that modern day condo-seekers want.
Top of the Valley - Edmonton Condominium
As of April 28, 2009 there were 59 two bedroom condos for sale in Oliver and downtown Edmonton that were built between 1970 and 1989. They can be found here: RES A Email Large. The median price per SqFt of $264.47 for these older units is quite different from those active condos that were built in ‘05 or newer; almost $150 dollars per SqFt.
With such a significant difference between the asking price of older and new condos; are there opportunities to purchase an older condo in Edmonton for a lower price? Could some of the money saved be spent on renovating your condo to your personal style?
Current Edmonton Condo Developments Move Forward
It depends on who you ask. First time home buyers have welcomed the drop in Edmonton condo prices we’ve seen over the past year and a half; condo speculators not so much. Then there are others on the sidelines who look to the Edmonton real estate market as a signal of the economic health of the capital region.
Earlier today the Edmonton Journal reported that despite the less than ideal market conditions, Edmonton condo developers are confidently moving forward with projects that are under construction, despite cancelled projects in Calgary, Canmore and Kelowna.
So what does this mean for these three groups of condo-watchers?
First, the potential condo buyer:
Its no secret that tens of thousands of young people have moved to Alberta over the past 3-5 years. Most people who moved to Alberta came here to find better jobs with higher wages. I would argue that in most industries Edmonton has higher wages than even Toronto and Vancouver. While there have been no shortage of good paying jobs the past few years, many first time home buyers who relocated to Alberta several years ago got priced out of the real estate market when prices soared in 2006.
These people have been renting and saving up for a down payment so they can buy their first home. The majority of first time home buyers in Edmonton turn towards condos because of affordability and lifestyle. For these first time home buyers the news that current condominium developments are moving forward is good news; it means condo inventory levels will remain high, giving buyers lots of choice and leverage when negotiating the purchase price, the timing of possession, and other points on the purchase contract that are specific to each transaction.
Second, condo sellers:
The news isn’t so great here. With a large inventory of condos on the market in Edmonton for buyers to choose from it will continue to be difficult for sellers just to get buyers to look at their condo let alone make offers at last years prices (which is where some sellers still have their condos priced). The best strategy is to have your condo marketed effectively and priced competitively so it can stand out from its competition.
Those who are selling to move to a single family home or relocate to another city will able to cancel many or all of the effects of higher inventory and lower condo prices, by benefiting from the same factors when they go to buy since most real estate markets across Canada are facing similar environments. Those who bought a new condo in Edmonton during the price run-up with the intent to “flip it” are in a tougher position. If it is sitting vacant they have the dilemma of whether to rent or sell.
Finally, the Observers:
With condo developments “put on hold” else-ware in Canada, and the constant barrage of doom and gloom in the US and international media, having Edmonton condo developers continue their projects shows that they are confident in the economic stability of Edmonton.
Yes, oil prices are down, but people around the world haven’t hung up the keys to their car yet. Experts continue to say that Canada is in strong position compared to other countries. And Edmonton continues to offer strong job opportunities, in the face of manufacturing lay-offs in Ontario and Quebec.
Relative to the rest of Canada, and the rest of the world - Edmonton is a pretty good place to be.
Article by: Nathan Mol, Coldwell Banker Johnston Real Estate
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