Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 25, 2015 08:15 ET

Reduced Housing Starts in the Calgary CMA Through 2016

CALGARY, ALBERTA--(Marketwired - May 25, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) Spring 2015 Calgary Housing Market Outlook released today, total housing starts in the Calgary Census Metropolitan Area (CMA) are forecast to decline to 13,200 units in 2015 followed by a further reduction to 11,500 in 2016.

"Positive net migration and low mortgage rates will continue to support housing demand in the Calgary region," said Richard Cho, CMHC's Principal, Market Analysis for Calgary. "However, increased economic uncertainty, coupled with rising existing home supply, will slow new home production through 2016," he added.

In 2015 and 2016, the pace of single-detached production will slow to 5,700 and 5,500 units, respectively. "Moderating employment growth, reduced net migration, and increased selection in the existing home market will contribute to the decline in single-detached starts," said Cho. "In addition, should a large price differential remain between existing and new home product, this will be another contributing factor inhibiting production over the forecast period," he added.

Following a record year where builders initiated 10,637 units, multi-family starts, which include semi-detached units, rows, and apartments, will decline in 2015 and 2016. The number of units under construction remains elevated, which will result in upward pressure on inventory levels once they reach completion. Combined with moderating demand and increased selection in the existing home market, this will reduce multi-family starts to 7,500 units in 2015 and 6,000 in 2016.

Weaker economic conditions will slow employment growth and net migration, which will reduce MLS® residential sales in 2015 to 24,700 transactions. In addition, listings have risen considerably since the tail end of 2014, which has offered buyers more choice and time when making their purchase decision. While low mortgage rates will continue to support sales, the recent shock to the economy brought on by low oil prices has resulted in consumer confidence taking a step back. In 2016, provided oil prices and consumer confidence improve, MLS® sales are forecast to increase marginally to 24,900 units.

The average MLS® residential price will decline by 2.7 per cent to $448,000 in 2015. Price pressures built up from previous years have dissipated, particularly given the recent pronounced increases to supply and easing housing demand. New listings are expected to continue rising through 2015, followed by a reduction in 2016. Active listings will follow suit, which will allow a marginal rate of price growth in 2016 as sales are expected to experience a slight uptick. In 2016, the average MLS® price will increase to $453,000.

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.
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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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Contact Information

  • Market Analysis Contact:
    Richard Cho, Principal, Market Analysis (Calgary)
    (403) 515-2996
    rcho@cmhc.ca

    Media Contact:
    Dan Toth, Public Affairs Advisor
    (403) 515-2976
    dtoth@cmhc.ca