The Edmonton real estate market is buzzing with activity, showcasing a dynamic mix of growth, investment, and stability. August marked a significant milestone as the city recorded its highest annual rent growth, reflecting the strong demand in the rental sector. Meanwhile, neighbouring St. Albert is making headlines with a record number of approvals for multifamily housing in the first half of 2024, signalling a shift towards denser, more diverse living options in the region.
The momentum doesn’t stop there. The federal government’s commitment to urban renewal is evident with a substantial $23.7 million allocation to the Blatchford redevelopment project, a transformative initiative set to reshape Edmonton’s urban landscape. Private investors are also playing a pivotal role, with local entities purchasing 12 office buildings for a total of $135 million over the past 18 months, highlighting confidence in the city’s commercial real estate market. Amidst all this, retail rental rates in Edmonton have remained remarkably stable, offering a balanced outlook for both investors and tenants.
We’ll delve into these key developments and provide insights into what they mean for the future of the Edmonton real estate landscape.
Edmonton records highest annual rent growth in August
According to a recent report from Rentals.ca, Edmonton is on pace to record its highest annual rent growth this month.
Average rent for a one-bedroom is $1,389 which represents a M/M increase of 1.5% and a Y/Y increase of 16.0%. Average rent for a two-bedroom unit holds relatively steady M/M with an increase of 0.4% at $1,716. This represents a Y/Y increase of 12.0%.
Despite the increases, Edmonton rent remains among the top five most affordable within Canada’s big cities.
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Record number of multi-family housing projects approved in St. Albert
The St. Albert Gazette reports that St. Albert has approved more apartments, townhomes, semi-detached homes, and condos in the first six months of 2024 than ever before.
Development permits were issued by the City of St. Albert for 712 multi-family housing units over a six-month period. This correlates to a 175 percent increase compared to 2023 which saw a total of 404 multifamily units approved over the entire year.
The city’s development branch manager for planning, Colin Krywiak, says the bulk of the growth in multi-family is coming from apartments. The demand for affordable housing as well as new federal government funding programs aimed at incentivizing multi-family developments are largely driving this growth.
There are several mid-rise apartment complexes already underway in St. Albert including Riverbank Landing, Midtown, and East Village.
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$23.7 million in federal funding to support energy sharing system in Blatchford
The federal government recently announced $23.7 million in funding for the Blatchford redevelopment project in Edmonton.
These funds will be used to install additional heat pump and auxiliary equipment for the Blatchford district energy sharing system as well as the design and construction of a growing distribution piping network and sewer heat exchange energy centre.
The system, when completed, will centralize energy production and circulate it through underground pipes to all the buildings within the community. The result is significantly less energy use compared to a traditional system where each building has its own equipment.
The Blatchford development is one-of-a-kind in Edmonton. Built upon the site of the former City Centre Airport lands, the goal is to be carbon neutral and to use 100 percent renewable energy to power the community.
Currently there are 90 units occupied in Blatchford with another 60 units already built or under construction. According to the city, another 500 homes will be built in the neighbourhood including a 90-unit townhouse rental development and four six-storey apartment buildings. Eventually Blatchford will be home to 30,000 people.
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Local private investors purchase 12 office buildings for $135 million
Commercial real estate in Edmonton is also heating up. Over the past 18 months, local private investors purchased 12 office buildings worth a combined $135 million.
According to a recent Edmonton Journal article, the purchased buildings include:
- Whitemud Business Park
- Broadmoor Place A and B and VII and VIII
- Clark Builders Place
- 5241 Calgary Tr.
- 10451 170 St.
- Compass Place
- Plaza 124
- Parkwest Business Centre
- Phipps McKinnon Building
- Empire Building
- Sun Life Place
With institutional investors largely holding on the sidelines, local private investors are sweeping in and taking advantage of attractive pricing and less competition in the market right now. More attractive financing likely also plays a role, with the Bank of Canada cutting the key interest rate for a second time, down to 4.5 percent.
One of the buildings, the Phipps McKinnon, will be transformed into residential units.
Edmonton’s retail rental rates remain stable
Despite rising rates across Canada, Edmonton’s retail rental rate is holding steady in certain categories, which will continue to attract investors looking to open businesses in the city.
During the first half of 2024, Edmonton’s market remained stable across five of eight different retail space categories:
- Regional mall ($110-130 per square foot)
- Power centre ($22-28/sf)
- Community-enclosed ($40-55/sf)
- Mixed-use-urban ($33-42/sf)
- Mixed-use-suburban ($25-32/sf)
The three categories that saw increases in net asking rent were:
- Community-unenclosed ($38-46/sf)
- Neighbourhood ($38-45/sf)
- Convenience/strip ($33-42/sf)
Top retail spaces are often in suburban areas, particularly sites that are anchored by grocery stores. A key area of interest for investors continues to be southwest Edmonton due to the fast-growing population in that area of the city.
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Edmonton’s real estate landscape is well positioned for sustained success
As Edmonton’s real estate market continues to evolve, the developments highlighted above signal a promising trajectory for the region. From record-breaking rent growth and multifamily housing approvals to significant federal investments and robust local investor activity, the city is clearly on the rise.
These trends not only reflect the resilience and appeal of Edmonton’s real estate sector but also point to a future where the city is poised to become a key hub for both residential and commercial growth. With a stable retail market complementing these dynamic changes, Edmonton’s real estate landscape is well-positioned for sustained success in the years to come.
With 20 years of experience in the Edmonton real estate market, Wally Fakhreddine has assisted hundreds of home buyers and sellers.
Phone or text Wally at 780.238.7384 and plan your next move.