Single-family housing starts drop in first half
Figures show economic uncertainty weighing on buyers: CMHC analyst
Construction starts on singlefamily homes in the Calgary area dipped 16 per cent over the first half of 2015 compared to the same months a year ago.
Shovels turned for 6,589 singlefamily homes in the Calgary census metropolitan area between Jan. 1 and the end of June, says Canada Mortgage and Housing Corp. A year earlier, there were 7,859 starts. The census metropolitan area includes builds in neighbouring areas such as Airdrie, Cochrane and Chestermere.
Single-family home starts in the Calgary area ranked second among urban centres in Alberta over the first half of the year, trailing the Edmonton area where 3,020 broke ground. For Edmonton, this was an uptick of three per cent from 2,937 starts a year earlier.
The decline in the Calgary area included a downswing from 1,189 starts in the first quarter to 972 in the second quarter.
“There is still quite a bit of uncertainty in the economy and that’s weighing on buyers’ minds,” says Richard Cho, CMHC’s principal of market analysis.
“We’re seeing some concerns coming out of China, what’s happening in Greece, as well. We continue to hear announcements of layoffs here in Calgary, so I think those are some things that buyers are thinking about and keeping them from moving ahead with their buying decisions.”
The resale market also saw single-family home sales cool off over the first six months of 2015. Sales eased 25 per cent to 6,207 from Jan. 1 through the end of June compared to 8,300 a year ago.
Another factor on the local economy and residential construction were prices in the energy sector over the first part of 2015, Cho says.
“Oil prices dropped dramatically in the early part of the year and it certainly surprised a lot of buyers,” adds Cho.
“The price since then has come up a bit but I still think there’s quite a bit of concern about the outlook of the economy in the housing market. I think that is impacting housing demand.”
Leading all areas of the city in new construction of single-family homes over the first half of the year was a section of southeast Calgary that includes Auburn Bay, Mahogany, New Brighton and Copperfield, where shovels turned for 509 homes. This total also includes activity in the communities of McKenzie Towne, McKenzie Lake and Douglasdale.
The only other area of Calgary with more than 200 starts was a stretch in the northwest quadrant, comprising Sherwood, Kincora, the Hamptons and Edgemont, where 277 single-family homes broke ground.
Outside Calgary city limits, single-family starts in Airdrie and Cochrane both pulled back between Jan. 1 and the end of June compared to the same days in 2014.
There were 164 new builds in Cochrane compared to 233 a year ago and 316 in Airdrie down from 396.