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Alberta sees largest drop in residential construction investment in the country

Alberta has registered the largest fall in new home construction in the country, according to Statistics Canada, as the province battles one of the worst recessions in recent history.

Fifth consecutive quarterly decline as recession takes hold

Alberta recorded its fifth consecutive quarterly decline in residential construction investment. (Associated Press)

Alberta has registered the largest drop in new home construction in the country, according to Statistics Canada, as the province battles one of the worst recessions in recent history.

Residential construction investment fell 17.4 per cent to $4.2 billion in the second quarter of 2016, compared with the second quarter of 2015, marking the fifth consecutive quarterly decline.

The drop was driven by lower spending on all four major dwelling types, especially single-family homes, Statistics Canada said.

Massive layoffs in the oil sector and reduced consumer confidence are keeping many buyers on the sidelines, the Canada Mortgage and Housing Corporation said earlier this year.

Alberta was one of five provinces to see a decline, followed distantly by Nova Scotia.

Despite that, overall investment was up nationally for the 10th straight quarter — with Ontario, B.C. and Quebec leading the charge.

Canada's total value of residential construction investment rose 3.9 per cent to $30.8 billion in the second quarter compared to 2015.

Condo construction and single-family dwellings accounted for much of the gain at the national level, but semi-detached dwellings recorded their fifth consecutive year-over-year quarterly decline.

Alberta renovation spending rises

Meanwhile, Albertans are spending more on home renovations, show figures obtained by the Canadian Home Builders' Association.

Renovation spending in the second quarter of 2016 increased year-over-year by 4.7 per cent to $1.56 billion, CHBA Alberta said.

"The figures show Albertans continue to see spending on home improvements as a good investment," said CHBA analyst Richard Goatcher.

"Increased renovation spending also helps support Alberta's economy and create jobs at a time when many other sectors are struggling," he noted.

The group is also anticipating a boost in spending on energy efficiency upgrades in 2017 when the new carbon tax takes effect.

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