In Vancouver and Toronto’s housing markets, a lot of money doesn’t necessarily get you a lot of house. But in Edmonton, $1 million is still enough to get you a house — and a nice one at that.
“In Edmonton, we are fairly conservative people and any home purchase or sale over one million is defined as luxury,” says Kerri-lyn Holland, a luxury real estate agent with Holland and Associates. Holland and her husband, Jason (who played in the NHL for the Islanders and Kings), have served the local real estate market for more than 17 years by helping clients buy and sell homes, and helping builders with construction projects. “However, each client has a different expectation of what their investment will bring, and we work with their individual definition of luxury.”
During the pandemic, Edmontonians have set their sites on larger homes with more amenities and scenic views. “Without the ability to travel or spend money else-where, the focus went to real estate with people wanting to make their surroundings more comfortable,” Holland says. “We found people wanted to turn their home into their sanctuary, and river valley or downtown views have been in demand.”
In June 2020, the Hollands started seeing an increase in activity in the luxury market. According to public MLS data, seven properties sold above $2 million between March 2020-2021. The following year, 29 properties sold above $2 million and 254 homes sold for more than $1 million. And, even as the world opens up, Edmontonians are eager for single family detached homes — and are willing to pay big bucks for them. Pre-pandemic, in 2019, Edmonton did not sell a single home over $3 million. As of May 2022, five homes have sold for more than $3 million.
“We initially anticipated [at the beginning of the pandemic] that housing demand would stall because of a very uncertain economic environment, but, instead, we had a lowering of interest rates and a growing preference for space that supported the demand for single detached homes,” says Felicia Mutheardy, a corporate economist for the City of Edmonton. “The availability of certain units and relative affordability can play a role in the demand for certain housing types, but it really largely comes down to buyer preference.”
Demand for luxury amenities also increased as people invested in renovations to make their home a place where they could spend a lot of time. “This trend was missing in Edmonton,” Holland says. “If you go into Calgary, Vancouver or Toronto’s market, a lot of amenities — like indoor skating rinks or full gyms — are already there. [Edmontonians] realized that they can invest in their property.” Holland says a mix of modern and traditional looks is popular, and does well in the resale market. “That transitional look of modern, clean lines with the warmth of extra detailing translates very well in the market — more and more clients are requesting it,” Holland says. “When it gets to -40 degrees, you don’t want the white, stark, ultra-modern look because it’s not very inviting.”
Increased demand for luxury fixtures like countertops, windows and lighting has led to an increase in companies willing to import and supply these items from European and American markets. “[Jason and I] built our own house in Crestwood back in 2008 and, while we were able to import quite a number of things from the U.S., we couldn’t find a lot of things locally. Now in 2022, a lot of the same companies we bought from are wanting to sell their product in Edmonton. And local companies are stepping up their game to provide higher quality products because it’s becoming a more competitive market.”
Even with the lifting of restrictions and the return of travel and events, Holland does not think the interest in luxury real estate will subside any time soon. “There is not nearly enough supply to meet demand,” Holland says. “We have a list of about 20 clients who want certain luxury products in the $1 -$4 million range. Knowing how little inventory is out there, and how much demand there is, it’s going to take more than a couple of months to equal out.”
Despite increasing demand for luxury homes, Holland is hesitant to say that Edmonton is poised to become a market like Vancouver or Toronto any time soon, where people offer higher than asking prices for something, well, not so luxurious. “We do a lot of business in mature neighbourhoods central to the core, but there is almost no supply because people want to hold on to their homes,” Holland says. “In real estate, you’re dealing with people’s emotions, and people often don’t want to sell — even for $1 million — because you can’t put a price on a lifetime of memories.”
But bidding wars and overpaying for homes are not impossible scenarios — in Holland’s own neighbourhood of Crestwood, a piece of land that would usually sell for $600,000-$650,000 recently sold for $825,000. “There are always emotional buyers and emotional sellers.”
Similarly, Mutheardy doesn’t see Edmonton becoming an unaffordable city with total lack of supply any time soon. “Conditions in Edmonton are quite different from Vancouver or Toronto, especially when you consider supply constraints for residential construction,” Mutheardy says. “Edmonton is the economic anchor of a large metropolitan area that has ample land on which new builders can build new homes. It’s a different housing market, and the factors that are important to buyers in Edmonton are not the same as in Toronto.”
At the beginning of August, we did a simple MLS search for the City of Edmonton. We asked to see how many residential properties — land, homes and condos — were on the market for $1 million each or more.
How many hits did we get?
Um, 301. That’s right 301.
Where are the high rollers selling? The highest number of $1 million-plus homes on the market can be found in Windermere. There were 40 such homes on the market.
This article appears in the September 2022 issue of Edify
