# Moody's analytics says Edmonton is undervalued



## yousufj56 (Oct 4, 2018)

https://www.theglobeandmail.com/bus...-house-price-forecast-for-33-canadian-cities/

Read this article yesterday. Says housing won't crash but will slow down in price growth. 

However mentions that Edmonton will lead the pact in terms of price growth. 

Is it a smart strategy to buy property there and put it up for rent? I live in Toronto so I wouldn't be able to watch over the property constantly.


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## Beaver101 (Nov 14, 2011)

yousufj56 said:


> ...
> Is it a smart strategy to buy...how? Do you wish to be a satellite landlord?


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## Just a Guy (Mar 27, 2012)

I do t think any city will be immune to a correction, Edmonton included. According to stats Canada, the average income is less than 50k but the average house price is upwards of 400k. Those two numbers don’t add up to a non-corrective market with my math. That being said, there are probably deals in each market which will buck the trend. 

That being said, being a remote landlord is a lot more difficult than being a local one. Not something for the novice investor to start out with.


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## yousufj56 (Oct 4, 2018)

I was surprised that Moody's claims there won't be a price correction. I wonder what numbers they are basing that on. 

If we do see a correction, will it be as bad as the one in United States a few years ago?


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## nobleea (Oct 11, 2013)

Just a Guy said:


> According to stats Canada, the average income is less than 50k but the average house price is upwards of 400k. Those two numbers don’t add up to a non-corrective market with my math.


That's weird. This article, quoting stats can, says Edmonton has one of the highest median incomes in the country, at $82K (2016). Data from 2010 put it as high as $102K.
https://www.cbc.ca/news/canada/edmonton/economy-income-calgary-edmonton-2016-employment-1.4574667

The average home price in Edmonton is just over 370K.


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## Just a Guy (Mar 27, 2012)

I don’t go the biased reports from news casts...

https://www12.statcan.gc.ca/census-...&SearchType=Begins&SearchPR=01&B1=All&TABID=1

Median total income in 2015 among recipients ($)49,500

Median after-tax income in 2015 among recipients ($) 38,900

Median employment income in 2015 for full-year full-time workers ($)65053

Average after-tax income of one-person households in 2015 ($)50,502

Average after-tax income of households in 2015 ($)99,074

http://creastats.crea.ca/area/

Average house price has dropped from a high of $450k a few years back, but under 400 is close enough o just over 370 to me (the latest stats actually says 368).


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## Just a Guy (Mar 27, 2012)

It should be noted that, if you look at past years of this report, you’ll find it says things would be completely different for some places each year. They tend to contradict themselves on a yearly basis. 

I call this a “cover your butt” analysis. It will go up, unless it doesn’t and goes down, except it may also stay the same”


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## nobleea (Oct 11, 2013)

Regardless of what the number is, Edmonton (and Calgary) consistently have the highest incomes of major cities in the country. Edmonton in particular is always singled out as having the highest disposable incomes in the country (which means lots of shopping, right or wrong). House prices are below the national average (though the average is heavily influenced by TO and Van).


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## Just a Guy (Mar 27, 2012)

The numbers are high across all of canada in my opinion, gta and GVA are ridiculously out of whack. Just because everything is overpriced, doesn’t make the lower end a bargain. Though bargains are there to be found. Edmonton is just less overpriced than other areas of Canada is my takeaway from this report...it doesn’t make it a good investment place necessarily. Best of a bad situation is still a bad situation...they may not correct as much as other places, but it doesn’t mean they won’t correct.


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## Mortgage u/w (Feb 6, 2014)

reports I've been hearing is a correction is already underway starting with out west.
Last month sales saw a drop of 44% vs 2017. Prices are slowly retracting. 

Still too early to tell what will happen though.


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## nobleea (Oct 11, 2013)

Just a Guy said:


> The numbers are high across all of canada in my opinion, gta and GVA are ridiculously out of whack. Just because everything is overpriced, doesn’t make the lower end a bargain. Though bargains are there to be found. Edmonton is just less overpriced than other areas of Canada is my takeaway from this report...it doesn’t make it a good investment place necessarily. Best of a bad situation is still a bad situation...they may not correct as much as other places, but it doesn’t mean they won’t correct.


I don't disagree with that.


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## lonewolf :) (Sep 13, 2016)

Prices have come down more then is being reported. Have to compare apples to apples. Higher end home sales of late has made it look like prices are not headed down. Its a game played by the realtors to try to keep the game going


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## Just a Guy (Mar 27, 2012)

We’re only seeing the tip of the iceberg. My calculations say 40-60% corrections off the high across Canada. That, of course, is my personal opinion based on the numbers I pulled from stats Canada before interest rates started to rise last year.


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## kcowan (Jul 1, 2010)

Just a Guy said:


> ..Edmonton is just less overpriced than other areas of Canada is my takeaway from this report...it doesn’t make it a good investment place necessarily. Best of a bad situation is still a bad situation...they may not correct as much as other places, but it doesn’t mean they won’t correct.


We sold our home in Edmonton in 1981 for $230k (bought in 1973 for $67k) and it resold in 1985 for $150k.


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## Mechanic (Oct 29, 2013)

We invested in real estate, hired property managers and rented in another Province once.....won't be making that mistake again. Absentee landlording isn't the best imo.


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## yousufj56 (Oct 4, 2018)

Just a Guy said:


> We’re only seeing the tip of the iceberg. My calculations say 40-60% corrections off the high across Canada. That, of course, is my personal opinion based on the numbers I pulled from stats Canada before interest rates started to rise last year.


Hey do you have any links with more details that support that theory?


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## Just a Guy (Mar 27, 2012)

Go to stats Canada and pull up the census information. I based “affordability” on the historical standard of a mortgage shouldn’t be more than 2.5-3X your income (which, for people who’ve only lived in low interest rates, seems silly but I’ve lived through real estate corrections and they haven’t).


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## WGZ (Feb 3, 2017)

As a first time home buyer in Edmonton, I found it difficult to find anything decent for under 350k in terms of detached single family home. Ended up going through a builder; building a new single detached home with 1550sq-ft living space for just under <350k with warranty, low maintenance/worry free living in mind, and current modern high efficiency appliances. It has a rough-in for a solar panel to run all the LED lights, Wi-Fi, etc. All the standard features I went through are more than enough for me and 1 or 2 others, as we don't require a lot. Just picked out all the exterior and interior design, now it's going to get built. Location is quiet, near some good main roads, decent location no more than 15-20 minutes away from everything I need. Bus stops a 2 minute walk away from the front door that will be going to the new LRT rail line through to Bonnie Doon > Downtown Core > WEM.

Leading up to making that decision, I spent a lot of time looking through listings and checking out homes. There are tons of suburban duplexes, condos, and townhomes to choose from flooding the market, because their prices are out to lunch - nobody wants them, especially in the outlying areas here. They need to knock 25-50k off those prices for me to even consider as they're priced right in line with detached single homes. Who knows, maybe you can make an offer and knock 25-50k off with ease. 

As population goes up, it's only a matter of decades before the entire Anthony Henday ring here is fully surrounded by residential neighborhoods.


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## yousufj56 (Oct 4, 2018)

lonewolf said:


> Prices have come down more then is being reported. Have to compare apples to apples. Higher end home sales of late has made it look like prices are not headed down. Its a game played by the realtors to try to keep the game going


Is there somewhere that reports this independent of the realtor sites?


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## Just a Guy (Mar 27, 2012)

Realtors can’t fudge the numbers, what’s recorded on mls is the selling prices. Ask a realtor of a comparables report and you’ll know exactly what properties have sold for.


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## lonewolf :) (Sep 13, 2016)

yousufj56 said:


> Is there somewhere that reports this independent of the realtor sites?


Ross Kay The wealthy home owner is probably the only site in Canada to get honest information regarding trends in real estate.


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## reccoso (Dec 16, 2010)

lonewolf [IMG class=inlineimg said:


> https://www.canadianmoneyforum.com/images/smilies/smile.png[/IMG];1986878]
> 
> 
> yousufj56 said:
> ...


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## lonewolf :) (Sep 13, 2016)

reccoso go to Howe street (the source for market opinions) go to latest radio & podcasts his latest interview Dec 3 2018, Nov 28, Nov 19, Nov 13, Nov 5 plus more if go back . Would listen to what he says then go from there weather or not you want to subscribe.


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## reccoso (Dec 16, 2010)

Thanks. I did that. He has interesting thoughts. Still not sure what his $20/month membership or $2000 buying/selling service provides to someone who’s not an investor. Anyone use his services?


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## Just a Guy (Mar 27, 2012)

Never trust someone’s opinion who makes money selling books, opinions, courses, etc. Trust the opinion of someone who makes money buying real estate.

Those who can do, those who can’t fleece you with their “expertise”.


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## lonewolf :) (Sep 13, 2016)

Probably the quickest easiest way to know where house prices are headed is to take one look @ the home builders index


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## Just a Guy (Mar 27, 2012)

House prices are going down. There’s no denying it. They are overpriced if you do the math, and got there by low interest rates and fools who look at monthly payments not final price. 

Anyone following the market over the past few years will see that prices are falling, but it’s only the tip of the iceberg, it’s going to get ugly.


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