Housing Starts Pick Up in Edmonton
Just yesterday we published a post showing the boom in Calgary housing. But now stats are out that show this city isn’t the only one in Alberta seeing an increase in demand – Edmonton is too!
You may not see quite as big a boom happening in Alberta’s capital city as you do in Calgary, but the numbers are still there to show that this housing market is also one that’s doing just fine. As you can see from the chart below, the number of 2012 housing starts outweighs the numbers from 2011 in just about every area, with the exception of single-family homes.
The chart shows that there were a total of 1304 housing starts in Edmonton in September of 2012, up from the 820 that went up during the same time last year. A very slight dip was shown in the single-family sector, but the number of multi-family homes soared to 500 more complexes started this year than last.
David Lan, the senior market analyst for Edmonton at Canada Mortgage and Housing Corporation, gives a few reasons for the increase.
“Gains in employment and low Edmonton mortgage rates contributed to higher demand for new homes in Edmonton,” he says.
Those low mortgage rates are currently the same rates the entire country has been enjoying for the past couple of years. But Edmonton’s employment rate surely boasts a more positive outlook than that of the rest of Canada’s. According to Statistics Canada, the Edmonton gained 6,000 jobs in September from the month before; and for the year, they’ve added a total 23,800 jobs since September of last year. This gives them the second-lowest jobless rate among the major cities in Canada, closely following Regina.
Yesterday we also talked about the huge influx of people coming into Calgary and looking for a home, and gave this as a reason why the housing market in this city was doing so well. But the same thing, albeit on a smaller scale, is also occurring in Edmonton. And with those people coming looking for a home, some have to be constructed first in order to provide them.
“Strong net migration also boosted demand for rental units, resulting in 187 multi-family rental starts last month,” says Lan. “We know that the rental market is really tight right now.”
This is also one of the reasons for the small decline in single-family homes, as these don’t make the ideal rental spaces that multi-unit complexes do.
But, weren’t the new mortgage rules supposed to slow growth? Maybe, but only for those that can’t afford to buy a home, or start new construction projects. In Edmonton, they can.
“The rise in Alberta’s housing starts in September speaks to the resilience of consumers and the strength in demand,” says Todd Hirsch, ATB Financial senior economist. “If the CMHC had not imposed their changes, it is very likely Alberta housing starts would have been even stronger.”