CMHC

CMHC

July 11, 2005 11:00 ET

Canada Mortgage and Housing Corporation: New Home Construction Increases Across Alberta's Urban Centres

CALGARY, ALBERTA--(CCNMatthews - July 11, 2005) - According to preliminary figures released today by Canada Mortgage and Housing Corporation (CMHC), new home construction in Alberta's urban centres totalled 16,154 units from January through June 2005, an increase of 9.2 per cent from the first six months of 2004. Both single-family and multi-family dwellings contributed to this growth. Amongst Alberta's Census Agglomerations (CAs), Red Deer experienced a decline in activity while Lethbridge remained stable. However, all three other Alberta mid-sized CAs reported strong increases in activity.

Fuelled by strong in-migration and employment growth, the single-family housing market in Red Deer recorded 373 single-detached starts in the first half of 2005. This is a two per cent increase compared to the 366 single-detached starts in the first six months of last year and a second best January to June performance on record. "Full- and part-time job creation and an impressive year-over-year population increase of 4.2 per cent in 2005 are the major factors generating persistently strong housing demand in Red Deer," said Elena Salikhov, CMHC's Market Analyst for southern Alberta. Unlike the single-family market, the construction of multi-family units declined in 2005. To the end of June, multi-family builders started 153 units, a decline of 55 per cent compared to the same indicator one year ago when 340 units began construction. The decline is due to a fall in rental construction. Last year, 182 rental units began construction in the first six months of the year compared to only 10 units in 2005. "Semi-detached units continue to be a popular housing type with consumers, as semi-detached starts increased from 46 units in the first half of 2004 to 92 units in 2005," noted Salikhov.

"Population gains are also boosting housing demand in Lethbridge," stated Elena Salikhov, CMHC's Market Analyst for southern Alberta. As of June of this year, 157 multi-family units began construction in Lethbridge, an increase of 32 per cent compared to 119 units started from January to June of last year. "Much of the increase in multi-family starts has come from a large apartment condominium project which began construction earlier in the year," said Salikhov. Single-family construction, on the other hand, slowed down this year compared to 2004. From January to June, 231 single-family homes broke ground compared to 268 units last year, a decline of 14 per cent. The decrease in single-family starts confirms the anticipated direction of the single-family market, which is expected to decline by three per cent to 540 single-family dwellings from 554 last year.

In Medicine Hat, year-to-date total new home starts, including single-detached and multi-family dwellings, reached 393 units at the end of June, 26 per cent higher than the same period one year earlier and the highest January to June total on record. To the end of June, multi-family starts, which totalled 178 units through the first six months of this year, have already reached the highest January to June total on record and more than doubled the construction activity reported in the first six months of 2004. Single-family starts are on pace to reach the second best performance on record. After six months, 215 single-family homes have begun construction, eight per cent less than the record set in 2004. "2004 was a record year for Medicine Hat's single-family builders and 2005 is expected to decline only slightly," according to Elena Salikhov, CMHC's Market Analyst for southern Alberta. "The overall market continues to benefit from low mortgage rates and strong consumer confidence," she added.

In the Regional Municipality of Wood Buffalo (Fort McMurray), CMHC reported that 676 new housing units were started in the first half of 2005, more than double what was built during the same period in 2004. "Strong population growth, oil sands investments, and the limited availability of existing units are stimulating demand for new housing in Wood Buffalo. This has led to 328 single-family starts in the first half of 2005, 71 per cent more than the first six months in 2004," said Charles Fortin, CMHC's Market Analyst for northern Alberta. The increase was even more pronounced in the multi-family market, where some major projects began construction earlier this year. These projects pushed the number of multi-family starts to 348 from January to June, significantly higher than the 79 units started in the same months in 2004. "Wood Buffalo's builders are as busy as ever. With close to 800 units currently under construction, the level of activity across the region is the highest on record," added Fortin.

Residential construction in Grande Prairie increased 16.4 per cent from 385 units in the first half of 2004 to 448 units this year. The growth is attributed to a 30 per cent jump in single-family dwellings, which rose from 290 starts from January to June last year to 376 so far this year, "As last year was a record for housing starts in Grande Prairie, builders are on pace to set a new high in 2005," said Charles Fortin, CMHC's Market Analyst for northern Alberta. "Strong and diversified economic growth in Grande Prairie is creating a multitude of new jobs, which in turn are increasing the demand for housing," added Fortin.



PRELIMINARY ALBERTA URBAN HOUSING STARTS

JANUARY TO JUNE 2005/2004

------------------------------------------------------------------------
SINGLE-DETACHED MULTIPLES TOTAL
June June % June June % June June %
05 04 05 04 05 04
------------------------------------------------------------------------
Grande
Prairie 376 290 29.7 72 95 -24.2 448 385 16.4
Lethbridge 231 268 -13.8 157 119 31.9 388 387 0.3
Medicine
Hat 215 234 -8.1 178 77 -- 393 311 26.4
Red Deer 373 366 1.9 153 340 -55.0 526 706 -25.5
Wood
Buffalo
(Fort
McMurray) 328 238 37.8 348 79 -- 676 317 --
------------------------------------------------------------------------
Alberta
(10,000+) 9,858 8,885 11.0 6,296 5,914 6.5 16,154 14,799 9.2
------------------------------------------------------------------------

Source: CMHC



Contact Information

  • For information about Fort McMurray or Grande Prairie:
    Canada Mortgage and Housing Corporation, Calgary Office
    Charles Fortin
    Market Analyst
    (403) 515-2902
    Email: charles.fortin@cmhc.ca
    or
    For information about Red Deer, Lethbridge or Medicine Hat:
    Canada Mortgage and Housing Corporation, Calgary Office
    Elena Salikhov
    Market Analyst
    (403) 515-2925
    Email: elena.salikhov@cmhc.ca