A growing trend in Edmonton means plenty of newly renovated homes on the market.
And that buyers need to beware.
In a report last month, the Bank of Canada says more homes in Edmonton are being bought and flipped for profit than in every other Canadian city except one.
Edmonton is a hot-spot for home-flipping. The Bank of Canada data, in a September update on indicators of financial vulnerabilities, shows just Calgary has a higher rate of homes on the market that are being re-sold within a year of purchase, outpacing other major Canadian markets such as Vancouver, Montreal and Toronto.
Calgary leads the way in 2024 with 7.52 per cent of homes bought and sold within a year, followed by Edmonton at 5.05 per cent, Vancouver at 2.7 per cent, Montreal at 1.26 per cent and Toronto at 1.07 per cent.
“The price of housing has gotten so high, particularly in the metropolitan areas, that financially to flip has become more challenging,” real estate broker Anne Alkok told CTV News Edmonton on Thursday.
Bank of Canada statistics.James Bailey, a contractor and designer for Brixton Flips, says she thinks there are several reasons why Edmonton and Calgary are leading the country in the number of homes being bought and flipped within 12 months, starting with the ability for people to make money.
“When we buy a house, we do our numbers, we say, ‘How much is this going to cost and how much is it going to be worth when I go to sell it?'” Bailey told CTV News Edmonton.
“When there’s an opportunity for that number to be higher than you thought it was, it’s good. There’s more room for you to make money, or, if there was a foundation crack you didn’t know about, at least you’re not losing any, and at the end of the day, that makes people more excited about doing it. It makes people take more risks.”
Jamie Keith of Access Home Inspection Services inspects flipped homes frequently and suggests buyers ask lots of questions, such as how old the shingles, wiring, windows and plumbing are and to see permits for that work.
“(Try to) get images of it prior to it being flipped because it’s obviously been listed recently before and see what sort of upgrades have been completed,” Keith said.
Questions are one thing. Bailey even suggests a more hands-on approach for such an important purchase.
“Rattle the door handles. Go shake stuff around. Open the cabinets, slam a couple of them. Who’s going to stop you?” Bailey said.
“If it falls off, maybe it’s not so good of a house.”