EDMONTON – The latest economic outlook from the province shows Edmonton has surpassed Calgary in housing starts this year, becoming the leader in new home construction in Alberta.
At the current pace, Alberta will see 36,500 new homes built by the end of this year – that’s about 4,000 more than had previously been estimated by the province. Edmonton has been the major driver of that growth, with housing starts up 31 per cent. Experts say the hot market is being driven by high population growth and low unemployment.
“People are being drawn to this city because of our relatively low unemployment rate. We’re at 4.5 per cent. We also have relatively high wages,” says Edmonton chief economist, John Rose. “So we’ve seen population growth pick up very, very sharply in the Edmonton area.”
“Our working age population, that is the population 16 years and over according to the labour force survey, has grown by 4 per cent in the last year, and that’s really remarkable,” he adds.
Rose explains that it’s not just Edmonton experiencing strong housing growth, but the whole region. However, he says that, for the year as a whole, “Edmonton is going to very handily outperform Calgary, both in terms of employment and housing starts.”
“We’ll have probably one of the best years we’ve seen for housing starts both in the city and in the region.”
Dan Hanna, of Parkwood Master Builder, has seen the effects of the hot housing market firsthand.
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“This is a record year in 25 years, so yeah – it’s been a good year.”
He says the company has experienced a growth of about 20 per cent, and based on what he’s heard from other builders, his company isn’t the only one seeing a surge in business.
It’s believed the market will soon begin to cool, though.
“As we get into 2014, we’re going to start to see interest rates moving up, we’ve seen some long-term mortgage rates go up over the past couple months. When we get into 2014, that really is going to begin to bite,” says Rose. “So affordability for housing – because mortgage rates are going to start to move up for 2014 – is going to be an issue. And again, that’s going to take some of the heat out of the Edmonton housing market.”
Rose believes those factors may bring the province’s housing market down 0.5 to 1 per cent, but Alberta will still continue to outperform the rest of Canada.
With files from Ross Neitz, Global News
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