September new home starts in Alberta lowest this year
New home starts in Alberta in September were much like the weather in September — gloomy — says the economics and research team at ATB.
“Housing starts across the province dropped to 22,295 in September, the lowest so far this year and the third lowest over the last five years. This figure is adjusted for seasonality and is reported at an annualized rate — that is, it’s the number of new homes that would be built in a year if this pace of building activity continued for 12 months. The 12-month trend in housing starts is now 0.2 percent below the level of starts in the previous 12-month period.”
If there is a silver lining in the numbers, ATB points to less downward pressure on prices.
“The fact that home builders are starting to slow the pace of new projects suggests that housing prices will stabilize and may even begin to rise a bit,” says ATB. “The volume of inventory of homes on the market has been a concern. With so much supply of both new and existing properties, housing prices have been flat.”
The lingering recession can be blamed for the slowdown, made worse by rising financing costs that will rise further.
“The Bank of Canada is expected to raise interest rates again later this month, and Alberta’s labour market slipped a bit in September, all of which is likely to slow demand,” says ATB. “Given that, a slowing of supply may be just what’s needed to keep the housing market stable and balanced.”
Total new home starts in the province in September were 1,826, down from 2,393 in September 2017. The Calgary and Edmonton census metropolitan areas (CMA) contributed, respectively, 834 and 597 starts to the total.
Here is a breakdown of key statistics in the Calgary CMA.