Edmonton Housing Starts to Moderate in 2013 and 2014

EDMONTON, ALBERTA--(Marketwired - June 25, 2013) - According to Canada Mortgage and Housing Corporation's (CMHC) Spring 2013 Edmonton Housing Market Outlook released today, total housing starts in the Edmonton Census Metropolitan Area (CMA) are forecast to reach 12,300 units in 2013, representing a decrease of four per cent from 12,837 units in 2012. The moderation will continue into 2014 as total starts reach11,800 units.

"The reduction over the next two years can be attributed to a slower pace of job growth, moderating net migration, and heightened supply levels, particularly in the multi-family market," said Lai Sing Louie, CMHC's Regional Economist for Prairie and Territories. "While modestly weaker economic fundamentals will contribute to a moderation in housing starts, the region's home builders will see new home construction surpass the preceding 10-year average of 11,205 units," he added.

Following a 13 per cent gain in 2012, single-detached starts in the Edmonton CMA are on pace to reach 5,800 units in 2013, representing a 2.5 per cent increase from the previous year. "While positive employment growth and an elevated level of net-migration will support demand for new single- detached homes, moderate price growth in the resale market will inhibit the pace of trade-up activity," said Louie. In 2014, heightened supply levels will slow the rise in single-detached construction. CMHC forecasts 5,900 single-detached homes next year, representing an increase of less than two per cent from the level in 2013.

Construction of multi-family units in the Edmonton CMA, which consist of semi-detached, row, and apartment units, will decrease to 6,500 units in 2013, representing a nine per cent reduction from the 7,179 units started in the previous year. In 2014, multiple dwelling starts will continue to moderate despite movement from rentals to entry-level ownership homes. CMHC expects multi-family starts to decrease to 5,900 units in 2014, representing a nine per cent reduction from 2013.

Demand for resale homes in Edmonton will continue to increase in 2013. Total residential MLS^® sales are on pace to increase by four per cent, reaching 18,400 units. An elevated level of in-migration, continued job creation, tight rental market, and low mortgage rates are helping bolster demand. Some migrants who arrived in 2012 and temporarily renting will also look to become homeowners this year. In 2014, resale activity will continue to strengthen, with total MLS^® sales increasing by two per cent to 18,800 units.

With market conditions improving for sellers, an average resale home is expected to be sold for $342,000 in 2013, representing an increase of 2.3 per cent from 2012. In 2014, there will be more buyers in the market relative to supply, giving the sellers some additional advantage. With further strengthening, the average resale price in Edmonton will increase by 2.6 per cent next year, reaching $351,000.

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.

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Additional data is available upon request

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