Price spread between new and resale condos reveals market strength

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Buying new generally involves a price premium over resale homes, including condominiums, and a new study suggests that the price spread in Edmonton’s real estate market is among the largest in Canada.

“That generally correlates with a strong housing market,” says Ryan McLaughlin, economist with RPS (Real Property Solutions), which recently published a report on new condominium values across Canadian markets.

The provider of appraisals for mortgage lenders looked at the difference in price between new and resale condominiums across provinces, finding that the spread has been tightening in British Columbia, Ontario and generally across Canada.

Yet Alberta has proven an outlier with the price difference widening since 2023, reflecting the strength of its largest markets, Calgary and Edmonton, McLaughlin says.

In 2023, the spread in price was $84,000 between resale and new condominium units in Alberta, and grew to $136,000 by 2025.

In contrast, the difference in price in British Columbia decreased from $102,000 to about $3,000 by 2025.

The closing gap been less in Toronto where it was $45,000 in 2023 and fell to $27,000 by 2025.

McLaughlin explains that Canada’s largest markets have been mired in slumps since 2023 as higher mortgage rates, economic volatility and a pullback in international migration have slowed demand, especially for condominiums.

Typically, multi-family projects take years to plan and complete, often devised when demand is high. Yet once units are for sale, conditions can be much different, as experienced in Vancouver and Toronto.

“The crux of it is just that the new condos are oversupplied relative to resale,” he says about these cities.

“There’s been stories about all these new condos not being able to be sold.”

When new condominium units do not sell after a building is established with tenants, they end up on the resale market, he adds.

Their higher cost factors into the overall average price of resale condominiums, resulting in an elevated average resale price relative to the new condo market’s average cost, he notes.

By comparison, Edmonton’s market remains healthy in terms of affordability and demand.

The widening between new and resale “also correlates with the strength of the labour market, so Ontario and B.C. have had slower employment growth than Alberta,” McLaughlin says.

Another reason is Edmonton’s condominium resale market has long been over-supplied, says a local realtor.

“Most developers in Edmonton are now focusing on rental complexes instead of new condominium complexes,” says Wally Fakhreddine, with Top Edmonton Real Estate.

Canada Mortgage and Housing Corp.’s new home starts statistics year to date, ending Aug. 31, show condo development accounts for only 10 per cent of activity.

That is compared with 47 per cent for freehold ownership, and 43 per cent for rentals.

In contrast, new condos in Toronto still make up 31 per cent of starts, versus 47 per cent for rentals and 22 per cent for freehold ownership homes.

Fakhreddine notes Edmonton’s resale condominium market has close to five months of supply, “nearly double” the entire market. Realtors Association of Edmonton statistics for September show apartment resales were down more than eight per cent year over year.

Still, it is the second most active segment of the market with 280 sales — though not much more than row (246 sales) and semi-detached homes (212). In contrast, single-family detached sales accounted for 1,221 transactions in September.

Sales for all housing types were down more than 10 per cent year over year.

Despite the condo average price seeing a 0.6 per cent year-over-year gain to nearly $209,000, Fakhreddine says that condos remain “definitely a buyer’s market.”