Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 25, 2015 08:15 ET

Prairie Housing Starts to Decline in 2015 and 2016

CALGARY, ALBERTA--(Marketwired - May 25, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) second quarter 2015 Housing Market Outlook, Prairies Highlights, housing starts in the region are projected to decrease. Starts totalled 55,067 units across the Prairie provinces in 2014, but are expected to decline and range from 43,400 to 49,500 in 2015 and between 38,900 and 46,300 in 2016. Starts will decline in both Alberta and Saskatchewan, yet remain stable in Manitoba.

"Demand for housing is expected to moderate as the oil price shock works its way through the economy," said Lai Sing Louie, CMHC's Regional Economist. "Low energy prices continue to dampen the outlook in the oil and gas industry as companies reduce capital expenditures and downsize demand for labour and services. This will continue to contribute to slower employment growth and net migration in energy driven economies like Saskatchewan and especially Alberta."

In Alberta, housing starts totalled 40,590 in 2014, but are forecast to decline and range from 31,900 to 36,500 units in 2015 and between 27,700 and 33,300 in 2016. In Saskatchewan, housing starts totalled 8,257 units in 2014, and are also expected to decline, ranging between 5,900 and 6,700 starts in 2015 and between 5,900 and 6,900 in 2016. In Manitoba, housing starts are forecasted to be relatively stable from 6,220 units in 2014 to range between 5,500 and 6,200 units in 2015 and 5,400 to 6,200 in 2016.

Weakening demand will continue to lower resale transactions in Alberta. After increasing to 71,773 in 2014, MLS® sales in the province will decline and range between 52,000 and 60,500 in 2015 and between 52,700 and 61,500 in 2016. In Saskatchewan, there were 13,868 resales in 2014; however, moving forward MLS® sales will decline and range between 11,300 and 13,100 in 2015 and 11,400 and 13,300 in 2016. In Manitoba, after 13,782 MLS® sales were achieved in 2014, resales are projected to range between 12,900 and 14,700 in 2015 and between 12,800 and 14,900 in 2016. Stronger employment growth, higher earnings, and continued elevated net migration to Manitoba will help keep sales relatively steady.

Alberta's average MLS® price in 2014 was $400,590. With many markets favouring the buyer, the average MLS® price in Alberta is expected to range between $366,600 and $402,000 in 2015 and $360,400 and $409,500 in 2016. In Saskatchewan, the average resale price was $298,359 in 2014. Supply levels are elevated relative to demand in Saskatchewan and the average MLS® price is expected to range between $282,000 and $304,500 in 2015 and $279,000 and $315,400 in 2016. In Manitoba, the average MLS® price was $266,329 in 2014. Supply is also elevated in Manitoba; however, demand is expected to remain steady. The average MLS® price in Manitoba is expected to range between $258,600 and $276,400 in 2015 and $260,100 and $287,100 in 2016

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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