Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

October 26, 2015 08:15 ET

Edmonton Housing Starts to Move Lower in 2016 and 2017

EDMONTON, ALBERTA--(Marketwired - Oct. 26, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) Fall 2015 Edmonton Housing Market Outlook released today, total housing starts in the Edmonton Census Metropolitan Area (CMA) are projected to increase to 16,400 units in 2015 before declining to 11,100 in 2016 and 10,800 in 2017.

"Relatively slow economic growth and reduced net migration will lead to softer housing demand in 2016," said Christina Butchart CMHC's Principal, Market Analysis for Edmonton. "By 2017, rising inventory on the multi-family market will lead to a further reduction in total housing starts," added Butchart.

Single-detached housing starts are forecast to decline to 5,900 units in 2015 and to 5,600 in 2016. "Weaker economic conditions and a well-supplied resale home market will continue to weigh down the new single-detached housing market in Edmonton next year," said Butchart. "By 2017, a slight improvement on the economic front should support some modest growth in housing demand and lead to a small increase in the number of single-detached housing starts, to 5,800 units in 2017," added Butchart.

Multi-family starts, including semi-detached, row, and apartment units are forecast at 10,500 units in 2015, followed by a decline to 5,500 in 2016 and 5,000 in 2017. Multi-family starts began 2015 at a record setting pace. However, slower employment growth this year, lower migration and a higher vacancy rate will slow demand in the multi-family segment of the market. Also, a higher number of completed and unabsorbed units is expected in 2016, and this will lead to a sharp decline in multi-family housing starts in the Edmonton CMA in 2016, followed by a more modest reduction in 2017.

MLS® sales are on pace to decline by 12 per cent in 2015 to 17,500, before rising to 17,800 in 2016 and 18,300 in 2017. Slower economic activity, coupled with lower consumer confidence, will lead to a reduction in the number of MLS® sales. In 2016, much of the same economic factors will keep demand growth in check, particularly through the first half of the year. By 2017 improving economic conditions should support modest growth in demand for resale homes in Edmonton.

A larger selection of homes and lower demand will temper price growth in Edmonton in 2015. The average resale price is forecast at $363,000 for 2015. Although supply is expected to contract modestly in 2016, demand will remain soft as low oil prices continue to weigh down employment growth and migration. This will lead to an average resale price of $366,000. By 2017, improving economic conditions will support a price gain of 2.2 per cent to $374,000.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

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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