Edmonton second in Canada in May for starts on single-family homes
Edmonton is among the top new homes markets in Canada, trailing only Toronto for single-family detached home starts, according to the latest figures for Canada Mortgage and Housing Corp.
The city saw 508 starts in May (the latest data available) for single-family homes, an 85 per cent jump over the same period the year before. The only major centre with more activity in the new detached segment was Toronto with 599 starts.
Edmonton, compared with other large centres, still has the ability “to take advantage of infill land and to grow along major highways,” says senior analyst Michael Mak with Canada Mortgage and Housing Corp.
By comparison, Vancouver has far less land available for single-family housing, and when infill opportunities do arise, developers often build multi-family because of the high real estate cost, he notes.
Calgary also does not have the same constraints on land as cities in British Columbia or in Ontario. Its market also saw significant activity with 460 single-family home starts in May, up 76 per cent year over year.
Like other jurisdictions, demand for single-family homes in Edmonton has been soaring during the pandemic, Mak says. Yet the city remains among the most affordable for the housing type, even for new builds. The average price of a new single-family detached home was more than $552,000 in May. In contrast, the average cost in Ottawa, which saw 361 starts in May, was $695,000 for a single-family detached home.
Despite being one of the more affordable markets for new homes, Edmonton realtor Nathan Mol says many buyers are still looking to the resale market despite its imbalance between low supply and high demand.
“I have had several clients who have looked at new home builds, but each time we have found that the increased costs the builders are facing are getting passed along,” says the agent with Liv Real Estate in Edmonton.
Pointing to the recent surge in lumber prices, along with increasing costs for other building materials, and the typical “premium” on new homes, Mol says buyers are facing prices $30,000 to $70,000 more on a new home than a similar resale property.
What's more, many clients interested in new builds are looking in the upper price end of the market for infill projects in mature neighbourhoods, he adds.
Still, Edmonton is among the more ideal markets for new single-family homes.
“Edmonton is fortunate to have an abundance of land ... so it's not surprising that new home starts are up here,” Mol says.
The CMHC starts figures also included activity for multi-family, town houses and semi-detached, which were up 40 per cent in aggregate year over year. Leading the way were semi-detached starts with 154 units in May, an increase of more than 140 per cent, year over year. The apartment segment, which includes rentals, saw the least growth in activity with 250 starts, up from 209 in the same month last year.
Mak notes that overall the picture for new builds remains bright in the city with the economy recovering from the pandemic and a sustained rise in the price of oil.
“As a whole, starts in Edmonton have rebounded.”