Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 18, 2016 11:51 ET

Edmonton Housing Starts to Move Lower in 2016 and 2017

EDMONTON, ALBERTA--(Marketwired - May 18, 2016) - According to Canada Mortgage and Housing Corporation's (CMHC) Spring 2016 Edmonton Housing Market Outlook released today, total housing starts in the Edmonton Census Metropolitan Area (CMA) are projected to range between 8,600 and 9,600 units in both 2016 and in 2017.

"The slow pace of housing starts observed in the first quarter is expected to continue through the remaining months of 2016 as slower employment growth, reduced migration and competition from the resale market moderate demand for new homes," said Christina Butchart CMHC's Principal, Market Analysis for Edmonton. "In 2017, elevated inventory levels will hold back the market, particularly in the first half of the year," added Butchart.

Single-detached production is expected to decline in 2016 to range between 3,700 and 4,500 starts before rising modestly to between 3,900 and 4,700 starts in 2017. "The pullback in single-detached starts is expected to continue through the end of 2016 as builders funnel demand towards expanding inventory. In 2017, inventory should become more manageable, particularly in the second half of the year, and will support a modest increase in single-detached housing starts," said Butchart.

After a record high 11,387 starts in 2015, multi-unit starts are forecast to range between 4,100 and 5,900 units in 2016 and 3,900 to 5,700 units in 2017. "Weaker economic conditions and an elevated number of units under construction are putting downward pressure on multi-unit construction," said Butchart. "A higher vacancy rate in the rental market and rising inventory in the home ownership market are also contributing to the pullback, which is expected to persist throughout 2016 and into 2017," added Butchart.

MLS® sales are expected to move lower in 2016 as a slowdown in the economy, lower migration and reduced consumer confidence continue to temper demand in the resale market. The pace of sales is not expected to gain much momentum until mid-2017 when economic conditions begin to improve. Overall, between 16,100 and 16,900 MLS® sales are expected in 2016. In 2017, sales are forecast to range between 16,400 and 17,200 transactions.

A slower pace of sales and more selection on the resale market will put some modest downward pressure on resale prices in 2016. By 2017 a slight pick-up in sales and a small contraction in the number of active listings should support modest price growth. Overall the MLS® price will average between $360,900 and $365,100 in 2016 and $364,900 and $369,100 in 2017.

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 our website at www.cmhc.ca or follow us on Twitter, YouTube, LinkedIn and Facebook.

Additional data is available upon request

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