Edmonton housing starts slow in September
'Employment losses, lower migration, and elevated new home inventory are tempering multi-family construction'
Construction on new homes in Edmonton slowed significantly in September as the economic downturn put a chill on the housing sector.
Actual housing starts were down 28 per cent year-over-year in September, according to the latest numbers from the Canada Mortgage and Housing Corporation.
Over the first nine months of the year there were 7,162 starts in the region compared to 13,499 during the same period in 2015.
"The trend in total housing starts continued to decline in September as a slower pace in multi-family housing starts more than offset an uptick in single-detached construction," said Christina Butchart, CMHC's principal, market analysis for Edmonton.
"Employment losses, lower migration, and elevated new home inventory are tempering multi-family construction in Edmonton," Butchart said in a statement.
'The economy is a little off'
The biggest drop was among apartment buildings and condominiums. There were 9,004 starts in that sector in 2015, compared to just 4,085 this year.
"The industry is not surprised at all," said Greg Christenson, president and co-owner of Edmonton-based Christenson Developments Ltd.
"The economy is a little off. Oil, of course, has been down for a while and we react to the general economy, particularly oil. And the multi-family sector is very cyclical."
Christenson said when he started working as a developer in Edmonton, the city was in the grips of a bust. In the 1980s, the construction industry was paralyzed by a downturn, low oil prices and high interest rates.
He believes the home building industry is better positioned to recover from this downturn. Interest rates are low, and demand for new housing remains strong.
His main concern is that builders will rush to take advantage of affordable labour in the downturn, and oversaturate the Edmonton market with new rental and condominium buildings.
"This isn't my first rodeo," Christenson said in an interview with CBC Radio's Edmonton AM.
"When the oil industry comes back, the housing will come back."