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Average prices hold as September unit volumes reflect interest rate adjustments

Edmonton, October 3, 2017
September’s all residential average sale price in the Edmonton Census Metropolitan Area (CMA) showed month-over-month consistency and was comparable to September 2016. The average sale price across all residential categories in September 2017 was $370,252. This figure is 0.85% lower than August 2017 and 1.06% lower than September 2016.

The average condo sale price was $252,313. This figure represents a month-over-month increase of 2.91% and a year-over-decrease of 0.31%. For single family detached sales, the average price was $430,644. This represents a month-over-month decrease of 1.75% but a year-over-year increase of 0.17%. The average duplex / townhouse selling price fell by 3.52% month over month and 5.55% year over year. 

"Once the distractions of summer are over, the market usually picks up with buyers looking to move in to a new home before the snow flies", says James Mabey, Chair of the REALTORS® Association of Edmonton. "However, it is possible we didn't see a strong performance for unit sales this September because the Bank of Canada raised interest rates twice this summer, putting some downward pressure on buyer purchase intentions. Despite this, consistent average sale prices last month throughout the Edmonton area (and across most property types) suggest the local market enjoys continued health."

The number of all residential units reported sold was 1,341. This represents a month-over-month decrease of 13.04% and a year-over-year decrease of 6.35%. The number of single family detached units sold was 812. This represents a decrease of 12.69% compared to August 2017 and a decrease of 10.28% compared to September 2016. There were 355 condominium sales reported in the Edmonton CMA in September 2017. This figure represents a month-over-month decrease of 10.8% and a year-over-year increase of 1.43%. Duplexes and townhouses numbered 159 unit sales in September 2017, down 13.59% month over month and up 11.19% year over year.

“Despite a slowdown in sales, it is encouraging to see duplexes, townhouses and condo sales rise compared to last September,” says Mabey. “Traditionally, these are the properties that attract first-time buyers and a strong entry-level market is a good indicator of consumer confidence. Inventory is strong for these types of buyers to make their move, especially for condos.”

Average days on market across all categories of residential properties in the Edmonton CMA was 58 days. This figure is one day longer than the preceding month and identical to September 2016. On average, single family detached homes sold in 53 days, condominiums sold in an average 67 days and duplexes / townhouses sold in 62 days.

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MLS® System Activity for September 2017 

1 Census Metropolitan Area (Edmonton and surrounding municipalities)
2 Single Family Dwelling
3 The total value of sales in a category divided by the number of properties sold 
4 The middle figure in a list of all sales prices
5 Residential includes SFD, condos and duplex/row houses. 
6 Includes residential, rural and commercial sales

 

 

CMHC to Increase Mortgage Insurance Premiums

OTTAWA, January 17, 2017 — CMHC is increasing its homeowner mortgage loan insurance premiums effective March 17, 2017. For the average CMHC-insured homebuyer, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI's new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital. Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.

During the first nine months of 2016:

  • The average CMHC-insured loan was approximately $245,000. 
  • The average down payment was approximately 8%. 
  • The average gross debt service ratio (GDS) was 25.6%. To qualify for CMHC insurance, a homebuyer’s GDS should not exceed 32% of their total monthly household income. 
Down payment between 5% and 9.99%
Loan Amount $150,000 $250,000 $350,000 $450,000 $550,000 $850,000
Increase to Monthly Mortgage Payment $2.82 $4.70 $6.59 $8.47 $10.35 $15.98

Based on a 5 year term @ 2.94% and a 25 year amortization 

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

Premiums are calculated based on the loan-to-value ratio of the mortgage being insured. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and repaid over the life of the mortgage as part of regular mortgage payments. Additional details and scenarios are included in the backgrounder below.

CMHC regularly reviews its premiums and sets them at a level to cover related claims and expenses while also reflecting the regulatory capital requirements.

CMHC is Canada’s most experienced mortgage loan insurer. Our mortgage loan insurance enables Canadians to buy a home with a minimum down payment starting at 5%. As a Crown corporation, CMHC is the only mortgage insurer whose proceeds benefit all Canadians.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For additional highlights please see the attached backgrounder.

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Information on This Release:

Karine LeBlanc
Media Relations
613-740-5413
kjleblan@cmhc-schl.gc.ca

Backgrounder

  • CMHC’s standard mortgage loan insurance premiums will be changing as follows: 
Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective March 17, 2017)
Up to and including 65% 0.60% 0.60%
Up to and including 75% 0.75% 1.70%
Up to and including 80% 1.25% 2.40%
Up to and including 85% 1.80% 2.80%
Up to and including 90% 2.40% 3.10%
Up to and including 95% 3.60% 4.00%
90.01% to 95% - Non-Traditional Down Payment 3.85% 4.50%
Down payment between 10% and 14.99%
Loan Amount $150,000 $250,000 $350,000 $450,000 $550,000 $850,000
Increase to Monthly Mortgage Payment $4.94 $8.23 $11.52 $14.81 $18.10 $27.98

Based on a 5 year term @ 2.94% and a 25 year amortization

Down payment between 15% and 19.99%
Loan Amount $150,000 $250,000 $350,000 $450,000 $550,000 $850,000
Increase to Monthly Mortgage Payment $7.06 $11.75 $16.46 $21.16 $25.86 $39.96

Based on a 5 year term @ 2.94% and a 25 year amortization

  • During the first nine months of 2016
    • Nearly 50% of CMHC’s transactional mortgage loan business were for loans of less than $300,000 
    • Nearly 95% of CMHC’s transactional mortgage loan business were for loans of less than $600,000 
    • Less than 1% of CMHC’s transactional mortgage loan business were for loans of more than $850,000 
  • CMHC follows OSFI guidelines for federally regulated mortgage insurers in Canada. 
  • Calculating the gross debt service ratio (GDS) allows potential homebuyers to estimate the maximum home-related expenses they can afford to pay each month. 

GDS = Principal + Interest* + Property Tax + Heat
Monthly Income

*Interest is calculated using the qualifying rate

  • Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. 
  • CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after March 17, 2017. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to this date, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance. 
  • The changes do not impact mortgages currently insured by CMHC. 
  •  
The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.