Job and net migration growth fuel housing demand
By Mario Toneguzzi, Calgary Herald
Alberta will be the only province next year to buck the national trend for housing starts across the country. According to an October 2011 Housing Forecast report released Tuesday by Altus Group, only Alberta is expected to see an increase in housing starts in 2012. Subdued economic growth will take the “sizzle” out of Canadian housing starts in 2012 and deteriorating global economic conditions leading to lower Canadian growth expectations will constrain housing demand across the country, said the report.
“Based on recent data, the Canadian housing sector is performing at a very high level, with elevated housing starts, steady prices, and steady resale markets. Interest rates are also no longer expected to increase over the next year,” said Peter Norman, chief economist, Altus Group. “But at the same time a number of risk factors are emerging, especially deteriorating economic conditions and tighter mortgage rules. Canadians can expect lower levels of housing construction in most areas of the country next year.”
But the report said Alberta has seen job conditions and interprovincial migration rise sharply this year at the expense of Ontario and British Columbia, positively affecting housing demand next year. Alberta will see housing starts in 2012 rise to 27,800 units from 24,881 this year. In 2010, there were 27,088 housing starts in the province. Across Canada, housing starts will hit 192,000 units this year and dip to 181,600 units in 2012. There were 189,930 starts in 2010.
The Altus Group report said only Calgary and Edmonton, among major markets in Canada, will see a rise in housing starts next year. Calgary will jump to 9,400 units from 8,400 in 2011 while Edmonton will see a rise to 9,400 units as well from 8,900 this year. In 2010, Calgary had 9,300 housing starts while Edmonton had 10,000.