Alberta home building industry has been ‘crippled’: builders

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Alberta home builders forced to cut jobs and projects
WATCH: Many home builders in Alberta say they're being forced to cut their workforce and some projects. Tomasia DaSilva reports on what they say is driving them to these drastic measures – Dec 3, 2018

Alberta’s home builders say the industry is in a dire state.

BILD Alberta — a unified voice for the land development, home building and renovation industry — said the industry has been crippled by fewer residential construction jobs, less affordable homes and uncertainty surrounding proposed legislation.

The association says the impacts have been far-reaching across Alberta, with some companies reducing their staff by 15 to 20 per cent in recent years.

READ MORE: Alberta home builders cut jobs and projects as industry faces tough times

On Wednesday, industry leaders gathered in Edmonton to discuss the issues.

BILD Alberta CEO Cameron Wyton said Alberta is experiencing a historic high in vacant new homes on the market and a 10-year low in housing starts.

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“This means, there are far fewer homes to be built, resulting in a considerable drop in the number of jobs,” she said.

“It’s difficult to estimate the overall impact, however, even conservatively, five to 10 per cent reduction in that workforce means thousands of Albertans are out of work.”

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Avalon Master Builder CEO Ryan Scott said his company cut about 20 per cent of its staff in the last three years, and last week, Jayman Built cut more than 15 per cent of its workforce.

Jayman Built CEO Jay Westman said the company is in a cycle of over-supply and under-demand which is “being driven by the current political landscape and the policies that have affected the primary driver of the western economy, which is energy.

READ MORE: Fort McMurray most affordable housing market in Alberta; Canmore least

Scott agreed the industry is facing a number of challenges, but pointed to regulations from the government which include tougher new mortgage rules as well as higher interest rates.

Wyton said skilled trade contractors may not be getting laid off, but the economic environment is impacting them as well.

“They’re certainly realizing a reduction in their work,” she said.

READ MORE: Here are the winners and losers of the new mortgage rules so far

Wyton also suggested new building costs being proposed by the province will hurt.

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“We know that every increase of $10,000 will put 20,000 Albertans out of the housing market. They won’t be able to afford the home they thought they were going to have,” she said.

Housing starts slumped 22 per cent from this past September to October, and they dropped 49 per cent year over year.

“We always want to be positive and be looking forward to growth and the future, and really over the last little bit, it’s been a struggle. We’re always planning for the worst, rather than planning for the uptrends, the growth,” BILD Alberta director Greg Nakatusi said.

“We’re entering 2019 really just trying to hope for something to stay steady for a change rather than look for that growth.”

CMHC, Canada’s national housing agency, is forecasting Alberta’s housing market will be flat in 2019.

In September, Edmonton experienced one of the largest decreases in home sales across Canada, according to the Canadian Real Estate Association.

READ MORE: Tough times continue to weigh on Calgary and Alberta home sellers

Recent data from The Calgary Real Estate Board suggested overall home sales declined almost 10 per cent in October across Calgary, with detached home sales down to levels not seen since the late 1990s.

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— With files from Global News reporter Tomasia DaSilva 

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