Back in the spring I was contacted by friend and an Editor for Canadian Real Estate Magazine who was writing a column on the Edmonton neighbourhood of West Jasper Place. that’s a neighborhood I’m very familar with, and between Brent and I, we were able to answer her questions. I’d mentioned this before, but CRE has finally started publishing full-text of some articles online (great SEO move!). Now I’ve included the article below for interests sake.
I’m also a big fan of the magazine, but I don’t think they’ll ship to Ireland. :p
Alberta: West Jasper Place
Situated in the western end of Edmonton CMA, West Jasper Place is a residential community with a population nearing 60,000.
April 22, 2009 – Situated in the western end of Edmonton CMA, West Jasper Place is a residential community with a population nearing 60,000. In-migration has slowed slightly, but Economic Development Edmonton expects people to continue moving to the city due to job opportunities.
The average household income is more than $68,000 and major employment is in the oil and gas industries, as well, employers include the West Edmonton Mall and government. About two-thirds of dwellings are owner occupied, while the other third is renters.
Unlike other parts of Edmonton where vacancy rates are rising, West Jasper Place is seeing a decline to 2.8% in October 2008, from 4.1% in October 2007, the CMHC says. This is a result of improvements in transportation, making for the area more accessible for commuters. One example is the North Edmonton Ring Rd., which connects Anthony Henday Dr. from Highway 16 in the west to Manning Dr. in the east.
As well, reasonable rental rates compared to other neighbourhoods in Edmonton are contributing to rising rental demand, which in turn is causing rents to climb slightly. The average rate for all units in October 2008 was $1,022, up from $983 the previous year.
“Rents have been doing fairly well over the past couple years, but now they’re in an environment where they’re a lot more competitive,” says Richard Goatcher, senior market analyst at Prairie and Territories Market Analysis Centre, CMHC, Edmonton. “While rents will continue to move upwards, it won’t be at the same rates we’ve seen in the past.”
Meanwhile, prices in this neighbourhood dropped to $330,543 by year-end 2008, from $356,632 in 2007, according to MLS. Unit sales declined during this period to 366, from 385, due to shaken consumer confidence. Listings are down slightly, with investors taking their units off the market and choosing a buy-hold-rent strategy instead, says Goatcher.
Bill Briggs, broker and owner at Re/Max Real Estate, Edmonton, says condos are a popular choice for investors looking for cash flow, since typical renters are singles and newly married couples who seek the condo lifestyle. Rents, specifically for condos, average $1,050 and vacancy is sitting at 2.4%, notes CMHC.
“Our marketplace has apartment style units that have been converted to condos starting under $175,000,” says Briggs. “The average reselling price (for these condo conversions), though, is in the order of $240,000 and we’re anticipating that the marketplace will remain very stable up to that level.”
Some brand new condos just coming online now may be available at a discount. According to Chris Davies, local investor, and Brent Davies, broker at Davies Management Realty, Edmonton, investors who bought pre-builds in 2007 and are taking possession in 2009 are finding prices have dropped. Some are forced to sell below their original purchase price.
The list price for these brand new units varies from $185,000 to $300,000, but buyers may be able to negotiate a discount up to 30% from motivated sellers, Chris Davies says. Though the average rent for a condo is about $1,050, these units, because they are new, can rent for a premium at $1,300 for a two-bedroom unit with underground parking. Typically, a first-year positive cash flow of $100 to $200 per month is easily attainable, he adds.
From the April 2009 issue of Canadian Real Estate
