A new new Canada Mortgage and Housing Corp. report is warning Edmontonians that housing starts in Alberta’s capital cold drop by a significant amount, according to the Edmonton Journal. The report, issued earlier this month, has pointed to slow “employment growth, reduced consumer confidence and the large number of resale houses on the market” as the primary causes for the expected drop.
The report uses past construction projects as an indicator as to what to expect in the future, pointing to how Edmonton fared in 2015 as an indication to what housing starts will look like now that construction season is fully underway. Looking at 2015 trends and the projected 2016 markets, the report argues that housing inventory will still be quite high, leading to many construction companies cancelling developments before shovels hit the ground. “The slow pace of housing starts observed in the first quarter is expected to continue through the remaining months of 2016,” the report says, “In 2017, elevated inventory levels will hold back the market, particularly in the first half of the year.”
Specifically, the report says that construction was started on 17,050 single-family houses and multi-family units in the region in 2015. For 2016 and 2017, the number of construction projects is expected to be around 8,600 and 9,600 respectively.
With fewer new homes on the market, resales will likely be key for any homeowners in the coming few years of house sales, since people who want brand new homes may not be able to find one at a decent price. Resales could, as a result, see an uptick in sales, which isn’t necessarily a bad thing since many new projects continue to push Edmonton’s sprawl to more frustrating levels. And, as Ice District begins to bring more people back to the downtown core, Edmonton’s housing market could make the city a very different place in just a few short years.
Dropping housing starts are not quite as severe in the rest of the country, but construction on new homes and developments is slowing on a national level. The reasons for this are many, including booming housing markets in Toronto and Vancouver discouraging new buildings, a lack of space in major metropolitan spaces, and Canada’s recent economic hardships