Housing investment lowest since 2012
Housing investment in Alberta is expected to remain flat at least into 2017 as the province’s residential construction industry continues to feel the impact of the economic downturn.
Statistics Canada says investment in new housing construction in Alberta has hit its lowest point since March 2012, falling about four per cent in June to $641 million.
Year-over-year, spending on new housing construction is down 30 per cent, with the most notable declines in the single-detached category (down 33 per cent, compared to apartment investment which has fallen by 23 per cent).
Allan Klassen, chair of CHBAUDI Calgary Region, which represents the city’s homebuilding and land development industries, said it’s unlikely activity will rebound in the near future.
“For anyone to say there’s light at the end of the tunnel would be overly optimistic,” he said. “We’re going to chug along where we are, for a while.”
But in spite of the challenging economic conditions, Klassen said there is still a “natural need” for housing in Calgary — as evidenced by the fact home prices have not fallen dramatically since the recession began.
“There is a limited supply of housing stock right now in Calgary, both new and used, so there’s still a good churn of products,” he said. “And there’s families that are growing, there’s lifestyles that are changing, there’s people that are moving here. I don’t see that lagging.”
Klassen suggested consumer confidence could begin to rebound in 2017 if job losses flatten out and some of the shock of the past two years begins to fade.
“I think we’ll really get a better sense of what’s happening come spring when we see what kind of listing activity we get,” he said. “People are going to get used to the new normal, and they’ll get back into the market.”
ATB Financial economist Nick Ford said the latest Statistics Canada numbers show Alberta’s construction and housing sectors are not nearing recovery yet.
“It looks like the trend of lower investment in all forms of construction is likely to persist throughout the remainder of the year and may flow over to next year,” he wrote in a commentary.
Investment in new housing construction across Canada rose 8.7 per cent to $4.4 billion in June, with Ontario and British Columbia posting the biggest increases.