Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

October 30, 2014 08:15 ET

Calgary Housing Starts to Moderate Following Projected Record in 2014

CALGARY, ALBERTA--(Marketwired - Oct. 30, 2014) - According to Canada Mortgage and Housing Corporation's (CMHC) Fall 2014 Calgary Housing Market Outlook released today, total housing starts in the Calgary Census Metropolitan Area (CMA) are projected to reach a record high of 17,200 units in 2014 before moderating to 14,400 in 2015 and 12,800 in 2016.

"New home construction in 2014 is being supported by consecutive years of record net migration, strong employment growth, and low mortgage rates," said Felicia Mutheardy, CMHC's Senior Market Analyst for Calgary. "Moving forward, supply levels for both new and existing homes are expected to rise while supporting economic drivers moderate, resulting in reduced starts for both 2015 and 2016," she added.

Single-detached starts are projected to reach 6,700 in 2014. In the two years following, starts will moderate to 6,400 units in 2015 and 6,300 in 2016. "While remaining supportive of housing demand, moderating employment growth and net migration will lead to lower starts in the coming years," said Mutheardy. Continued price pressures and additional listings in the competing resale market will also weigh against a gain in construction in 2015 and 2016.

Multi-family starts, which include semi-detached units, rows, and apartments, are projected to reach 10,500 units by the end of 2014, the second strongest performance on record. With the rise in construction this year, supply levels have increased and will apply some upward pressure on inventory levels once these units reach completion. Coupled with increased selection in the resale market, rising rental vacancies, and moderating economic factors, the pace of multi-family construction is expected to slow moving forward. In 2015, 8,000 units are expected to break ground with a further reduction to 6,500 in 2016.

MLS® residential sales in 2014 are projected to reach a record high of 33,500 units, supported by strong job creation along with elevated levels of net migration. Low mortgage rates have also contributed to the rise in sales. Over the next two years, MLS® sales are forecast to increase further, albeit at a more gradual pace, to 34,200 units in 2015 and 34,800 in 2016. Rising prices and slight upward movements in mortgage rates will contribute to the slower pace of growth.

The average MLS® residential price is projected to rise five per cent in 2014 to $459,000, supported by relatively low supply and strong demand. However, new listings are expected to increase over the forecast period as recent price gains entice some existing homeowners to list their houses for sale. This will ease price pressures and moderate resale price growth in the years ahead. In 2015, the average MLS® price will rise to $472,000. In the following year, the average price will reach $483,000, a gain of 2.3 per cent.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

For more information, visit www.cmhc.ca or call 1-800-668-2642. CMHC Market Analysis standard reports are also available free for download at www.cmhc.ca/housingmarketinformation.

Follow CMHC on Twitter @CMHC_ca

Additional data is available upon request

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Contact Information

  • Market Analysis Contact:
    Felicia Mutheardy, Senior Market Analyst
    (403) 515-3003
    fmuthear@cmhc.ca

    Media Contact:
    Charles Daniel Mainville
    Senior Communications Consultant
    (403) 515-2915
    cdmainvi@cmhc.ca