Real estate market takes a tumble
Investment since June 2015 off 30%, Statscan reveals
Investment in Alberta’s housing markets has nosedived, another sign of the province’s shuddering economy.
Statistics Canada numbers released Monday show investment in housing construction in Alberta has dropped 30 per cent since June 2015, to $641 million from close to a billion dollars.
That’s the biggest drop of any province. Only Nunavut’s housing market took a bigger hit.
Alberta’s bucked the national trend, which saw an 8.7-per-cent increase year over year, to $4.4 billion in June.
The province will release its 2016-17 first quarter fiscal update Tuesday, and with oil prices continuing to languish under $50 US per barrel, the picture remains bleak.
Wildrose MLA and jobs critic Grant Hunter said Alberta’s drop in housing investment isn’t a surprise and said points to a lack of confidence in the provincial government.
“You don’t need to incentivize companies. You need to instil a sense that government isn’t going to change the playing field a year from now,” he said.
Finance Minister Joe Ceci announced in June that Alberta was facing a $6.4-billion deficit for the 2015-16 fiscal year.
Ceci blamed the price of oil for the bulk of the gaping hole in Alberta’s finances and restated his government’s commitment to spending over cuts.
Hunter doesn’t question the NDP government’s intent — “I believe they’re trying to make things better,” he said Monday — but he doesn’t think it’s working.
“In the past, when oil was down, businesses would start building,” he said.
“But now, these guys are shelving projects because they don’t know what will happen six, seven months down the track.”
Alberta Economic Development and Trade Minister Deron Bilous doesn’t accept that argument.
From economic diversification to new investor and export tax programs, he said his government has been “working hand in hand with the business community across the province” to find out their needs and respond to them.
As a proportion of total investment in Alberta, housing has reached its lowest level since June 2009.
Jim Rivait, chief executive officer of the Canadian Home Builders’ Association — Alberta, said despite the drop, there is a glimmer of hope with some positive financial projections into next year.
“I don’t think anybody’s having a parade right now, but ... we’re still seeing some activity with people building and buying,” he said Monday.
He said the “jury is still out” on whether regulation uncertainty in the industry is behind the drop in new starts or whether it’s shaky consumer confidence.
Housing prices “are holding, so that’s an indication of some level of positivity about the market,” he said.
“Not everything is in a fire sale.”