Housing starts in Calgary will dip for 2nd straight year, CMHC predicts
By 2017 recovering oil prices could spark renewed demand for homes
Housing starts in Calgary will decline for the second year in a row, the Canada Mortgage and Housing Corporation predicts in its spring market outlook.
Total housing starts in the Calgary Census Metropolitan Area (CMA) will drop from just over 13,000 last year to range from 8,400 to 9,400 units this year and next, the report says.
"Reduced investments and layoffs in the energy industry due to low oil prices have spread and have impacted labour market conditions across many different industries," said Richard Cho, CMHC's head of market analysis for Calgary.
"This, combined with a rise in inventory, will moderate the pace of new home construction."
Single-detached starts are expected to decline in 2016 to a range of 3,300 to 3,500 units.
By 2017, CMHC is predicting demand for new homes will recover slightly, leading to as many as 3,700 single-detached housing starts.
There were 8,895 multiple housing starts in 2015, but that sector is forecast to decline and range between 5,300 and 5,700 units in 2016.
Residential sales in Calgary are expected to drop for the second consecutive year in 2016 and range between 19,800 and 22,200.
"Job losses, especially among full-time positions, and reduced consumer sentiment will keep many buyers on the sidelines," CMHC said in a release.
In 2016, the average residential price is forecast to decline and range between $444,500 and $449,500, compared to $453,814 in 2015.
"Oil prices in 2017 are expected to stabilize at higher levels compared to the year before, leading to modest improvements in economic activity," CMHC said in a release.
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