Edmonton Real Estate: Buy or Wait?

Buy or Wait for Edmonton Real Estate

With the gloom and doom headlines of late it is not hard to see why the prices of real estate in Edmonton and Calgary are falling fast. How fast you may ask? Based on recent data by Statistics Canada, Edmonton real estate prices dropped 2.8 percent and Calgary real estate prices dropped by 2.1 percent in January 2009. This is a drop in a month’s time which is significant when you look at the average home increase in the last 50 years is only 3 percent per year. The current drop in Alberta real estate prices is definitely a result of the global financial crisis caused by the subprime lending in the US. Buy or wait is the question, however, that many investors are now asking about Edmonton real estate. With prices dropping back to levels not seen for 2 years and rents more than double what they were back then is this a good time to buy? As with all buy or wait decisions, what investors should always pay attention to is their cashflow. Cashflow is king in any buy or wait decision. Can you afford to buy Edmonton real estate and have the rental income support all the cash flows that real estate investing has? Perhaps the answer is yes and maybe even better the answer is that buying Edmonton real estate right now will give you positive cash flow. Waiting on the other hand has it’s pluses and minuses as well. If you are waiting for a better deal on Edmonton real estate this just may never happen. The fact is real estate is always a cyclical market and with the current large fluctuations it is most certainly a fast moving one for good property. Waiting to buy good property may end up costing you.

Alberta Mortgage rates and Edmonton homes

Mortgages in Canada and especially in Alberta have given most investors a chance to afford the new home purchase. Even if prices were at the high of 2007 we can still see the average investor being able to afford the average Edmonton home. For example with current prime rate at 2.5 percent and most banks willing to lend to their best clients at Prime + 1%, the mortgage rate that investors will get right now are close to 4%. This low mortgage rate will make your Edmonton home more affordable by $300 or more depending on the size of your house. Most homeowners in Edmonton have been able to go to their banks and talk to them about their Alberta mortgage and have their amortizations extended and thus lowering their monthly payments. In a global financial crisis such as the one we are experiencing, the ability to keep more cash in your account is the key to surviving. Most Alberta mortgage rates that are on variable rate have benefited greatly from the drop in the Canadian Prime rate to 2.5%. With mortgage rates expected to be stable for the next 12 months most Edmonton homes will continue to be very affordable.

Summerside, Northeast, and other buying opportunities in Edmonton

Now the real question real estate investors in Edmonton have is where to buy their home? There are so many areas in Edmonton to choose from with some of the more popular areas being: Summerside and the Northeast. When deciding on buying your Edmonton home you need to know what the purpose of buying is. Are you an investor or are you going to buy the Summerside or Northeast home to live in? For a lot of people in Edmonton they are actually homeowners. There is still a lot of in-migration from the other provinces to Alberta. Edmonton is one of the most popular choices for people to locate as the jobs in Edmonton are still abundant as compared to other areas in Canada. Summerside is located in South Edmonton near the South Common Shopping Centre and minutes away from the new Anthony Henday ringroad. For people who work in the South or need to be near the Edmonton International Airport, Summerside is the ideal location. The completion of the Anthony Henday ringroad in the south has opened up the transportation routes and enabled the efficient flow of traffic to the area. Summerside is experiencing an explosion in commercial activity including Edmonton real estate development. The Northeast Edmonton area on the other hand is perfect for people who work in the army or North of the Fort Saskatchewan River. It is an area that will be going through an expansion in the next few years as the Anthony Henday ringroad is complete in 2011. The northeast is already slowly experiencing commercial and residential growth and has seen one of the best real estate returns in Canada over the last five years. So buying in Summerside or Northeast Edmonton will really depend on where you work and what you plan to do with your new Edmonton home.