Wednesday, 20 November 2013

Alberta Housing Starts Expected to Decline in 2014

Housing starts across Alberta are expected to reach 34,200 units in 2013 up from 32,400 in 2012. "Economic and demographic factors will continue to be supportive of Alberta's housing markets, with housing starts projected to rise to 34,900 units in 2014," said Lai Sing Louie, CMHC's Regional Economist for the Prairie and Territories Region.

Total housing starts in the Calgary Census Metropolitan Area (CMA) are on track to decline nine per cent in 2013 to 11,700 units, down from 12,841 units in 2012. In 2014, total housing starts are forecast to rise 12 per cent to 13,100 units. While increases are expected for single-detached starts, multi-family starts will experience more pronounced gains in 2014 following the reduction this year. "Employment growth, rising incomes and strong net migration, combined with relatively low inventories in the new home market, will support an increase in total housing starts in 2014," said Richard Cho, CMHC's Senior Market Analyst for Calgary.

By the end of 2013, housing starts are on track to total 13,900 units in the Edmonton Census Metropolitan Area (CMA). This represents an increase of 8.3 per cent over 2012. The pace of housing starts will moderate in 2014 to 12,200 units due to reduced activity in the multi-family sector. "Although economic growth will continue to support housing demand, the elevated level of multi-family units under construction this year increases the risk of rising inventory and will moderate construction in that sector," said Christina Butchart, CMHC's Senior Market Analyst for Edmonton.

In 2014, job creation and net migration will continue to be key drivers of the resale market in Calgary. MLS® residential sales in Calgary are forecast to increase 2.7 per cent to 30,000 units next year. In Edmonton, demand for housing in the resale market is expected to result in 18,600 sales in 2013, a 5.4 per cent increase over 2012. In 2014, MLS® sales will expand further to 19,000 units.

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