Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

October 26, 2015 08:15 ET

Prairie Housing Starts to Decline Further in 2016, Rebound in 2017

CALGARY, ALBERTA--(Marketwired - Oct. 26, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) fourth quarter 2015 Housing Market Outlook, Prairies Highlights, housing starts in the Prairie region are projected to decrease to 48,600 in 2015 and move lower to range between 32,900 and 49,500 in 2016 before moving higher to range between 32,600 and 51,200 in 2017. Housing starts will decline in all three Prairie provinces in 2015. In 2016, housing starts will continue to decline in Alberta but stabilize in Saskatchewan and Manitoba. By 2017, increased new construction in expected in all three Prairie provinces.

"The economic and housing market outlook for the Prairie region continues to be adversely impacted by low commodity prices," said Lai Sing Louie, CMHC's Regional Economist. "Lower oil prices have created economic uncertainty in Alberta and Saskatchewan. This will hold back growth in housing starts in both of these provinces in 2015 and 2016 before improving economic conditions provide some gains in 2017."

In Alberta, housing starts in 2015 are projected to reach 37,200, about an eight per cent decline from 2014. In 2016, housing starts are expected to decline further, and range between 23,700 and 35,900 before gradually rising in 2017 to range between 23,400 and 37,200. In Saskatchewan, a projected decline of 30 per cent in 2015 will take housing starts to 5,800 total units. This will lead to a stabilization of activity as starts in Saskatchewan are expected range between 4,600 and 7,000 in 2016 and between 4,600 and 7,200 in 2017. In Manitoba, housing starts are forecasted to decline in 2015 to 5,600 units and remain relatively stable and range between 4,600 and 6,600 in 2016 and 4,600 to 6,800 in 2017.

Economic uncertainty has lowered resale transactions in oil producing areas. In Alberta, resale transactions are projected to decline approximately twenty per cent in 2015. With oil prices assumed to gradually rise over the next two years, resales are forecasted to gradually improve and range between 53,700 and 63,500 in 2016 and between 54,400 and 65,600 in 2017. In Saskatchewan, MLS® sales are projected to decline near eleven per cent in 2015 before gradually rising and range between 11,500 and 13,700 in 2016 and 11,600 to 14,100 in 2017. In Manitoba, resales are projected to rise nearly 2 per cent above the 2014 level in 2015 and continue to increase by less than two per cent and range between 13,600 and 14,800 in 2016 and between 13,700 to 15,100 in 2017. Steady employment growth and continued positive net migration will help keep Manitoba's MLS® sales relatively steady.

With many major markets favouring the buyer in Alberta and Saskatchewan in 2015, the average MLS® price in both Alberta and Saskatchewan is expected to decline this year; however, this decline will be more pronounced in Alberta. In 2016, the average price in Alberta is forecasted to stabilize and range between $373,600 and $409,600 and then rise in 2017 and range between $379,000 and $419,800. In Saskatchewan, the average MLS® price will gradually rise and range between $287,500 and $314,100 in 2016 and $290,300 to $320,300 in 2017. In Manitoba, resale market conditions have been balanced in 2015 and supportive of price growth; this is expected to continue. The average MLS® price in Manitoba is forecasted to increase below two per cent in each of the next two years and range between $268,500 and $278,700 in 2016 and $271,800 to $283,200 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.

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