Today we are joined by Michael Brodrick, Chair of the REALTORS® Association of Edmonton. He discusses what’s going on in the real estate market today, how the stress test has effected sellers and buyers, and his predictions for the future of the Canadian market.
[0:37] It’s the spring of 2019. What are you seeing in the market?
- It’s a typical spring market. Things are improving after a very cold February.
- We are still seeing lower prices than in the past and sales are down compared to last year.
[1:59] What are your thoughts on the stress test?
- I think it’s not necessarily fair in the way it’s implemented.
- It’s implemented as federal policy with no regionalization, but Canadian markets can be very different.
- The stress test had the result of pushing prices down which resulted in a loss of equity.
[4:39] What other consequences have you seen from the mortgage stress test?
- People just not wanting to do anything, such as people deciding not to leave even though they may need to.
- We’re now seeing the impact of the stress test on people who are renewing.
- The stress test has caused a lot of problems for us, but the government seems happy with it.
- I find it interesting that they’re worried about how I’m investing a typically appreciating asset but there’s no issue with a credit card company bumping up my limit every year.
- Millennials do aspire to have home ownership, but they’re being led to believe that it’s not going to be feasible.
- Alberta has been hurting now for some time in a big way, and we see it.
[12:52] We’ve just had an election and the Conservative party is coming in to replace the NDP. What sort of impact do you think that will have on the public’s perception?
- We see a lot more consumer confidence in rural areas recently because of the change in government.
- That’s just some general, early consumer confidence because of promises that the party has made, but changes aren’t going to happen overnight.
- You might feel better about buying, but you still need to have the ability to.
[15:28] What is some of the feedback you’re getting from your membership right now?
- There’s still a reasonably large amount of inventory that’s out there to sell. Some of that is still remaining from last year, because last year was pretty slow in Edmonton.
- There also seems to be a lot of new inventory.
- We remain confident, and the general trend of the market is the same.
[17:54] What do you see happening in two to five years?
- I predict that we are on the upswing. Over time, we will see things sorted out.
- Economy-wise, I believe Alberta needs some sort of diversification.
[21:26] Any other last thoughts?
- It’s really important for people to understand that it’s not all doom and gloom. People should not be afraid to sell or buy.
- A home will always be a solid investment.