By Richard Goatcher, Economic Analyst, CHBA – Alberta
Alberta’s home builders expect 2015 starts will be reduced 15.5% from 2014 levels but the province-wide total of 34,300 units should still exceed the five-year average of 32,500 units started between 2010 and 2014.
A sample of Canadian Home Builders’ Association – Alberta (CHBA – Alberta) members was polled in January on their expectations for housing starts in 2015. The consensus forecast was that most of the slowdown in 2015 is expected in the multi-family segment, where starts are expected to decline by 20% to 16,840 units. Single-detached starts this year are expected to reach 17,460 units province-wide, representing an 11% reduction from 2014 totals.
The moderate reduction in construction follows a very busy year for Alberta’s new home building industry, with total housing starts across the province (urban and rural) reaching, 40,590 units. According to Canada Mortgage and Housing Corp. (CMHC), activity increased almost 13% over 2013, representing the best year for builders since 2007. Last year’s numbers were bolstered by a 20% rise in multi-family starts led by a record-level performance in Calgary region. Single-family builders saw their volumes rise by 6% over 2013 to 19,563 units.
New home construction levels were expected to decline in 2015. While Alberta’s population growth remained among the strongest in Canada during 2014, year-over-year gains have been edging downward in the past year due to lower levels of net migration. And while employment gains across Alberta were relatively strong throughout 2014, the large decline in world oil prices witnessed since June will have a negative impact on the province’s labour market during the first half of 2015.
In its previous forecast released in October of last year, CMHC had initially forecast housing starts in Alberta would decline 7% from 2014 levels to 37,400 units in 2015. In its First Quarter Housing Market Outlook released February 6, CMHC issued a revised forecast of 36,000 units for an 11.3% decline over year-ago levels. Multi-family starts were expected to total 17,200 units, down 18%; single-family starts were forecast to decline 4% to 18,800 units.