Housing starts in Edmonton were up in the final three months of last year. That’s both for single-family homes as well as multi-family units.
Builders broke ground on a total of 1,942 single-family housing units in October, November and December of 2019, said senior economist with the City of Edmonton Felicia Mutheardy. According to CMHC data, that’s an increase of 13.1 per cent year-over-year from 1,717 units in the same three months the year before.
When you add in all housing including apartments, “construction in 2019 was 7.5 per cent higher as 8,605 units broke ground.”
“It had been down on a year-over-year basis for every single quarter in 2019 with the the exception of Q4 in 2019,” Mutheardy told Global News in an interview, “With the release of the starts data as well as the release of the Realty Association’s December 2019 stats, we see the increase in production as being a sign of the market reaching stable ground, and demand actually starting to pick up.”
She’s basing the over-supply situation improving on projected population growth for the coming year. When the final numbers are in for 2019, Mutheardy said she expects there was a population increase of 2.2 per cent for the metro Edmonton region — roughly 20,100, plus another 17,900 or two per cent expected in 2020.
For the city proper the numbers would be 14,100 last year and 12,500 expected this year.
A large portion of the growing population will be international newcomers as opposed to people moving here from other provinces.
Details of the city forecast will be shared with the REALTORS Association of Edmonton at their 2020 Housing Forecast on Wednesday. Mutheardy said the strongest numbers are in construction of rental apartments which matches anecdotal evidence that’s been making the rounds.
“There definitely is an elevated level of supply, especially given the strong pace of apartment production. But in terms of single detached production and overall supply it is starting to come down to balance out. Elevated levels of supply is definitely something that we’re closely monitoring but we’re also seeing production actually adjust to counter-balance that.”
Rentals are now more popular than condos, especially downtown. Mutheardy said 2019 condo starts were 28 per cent lower than the year before, while all types of units, including semis, row-housing and apartments fell off 21 per cent.
Mutheardy expects 2020 starts to be lower than 2019. “The reason being is when we’re looking at some of the economic conditions that are supporting housing demand, in 2019 employment was really challenging, the labour market was really challenging and when we’re looking at that — supporting housing demand — we’re not necessarily seeing that strong push for an increase.”
“Looking at it from a fundamental standpoint, we’re definitely cautiously optimistic. I’ve used that phrase more often than I ever have, but we’re cautiously optimistic in terms of the fundamentals supporting housing demand. Not necessarily forecasting too significant of a drop in housing starts, but not looking at production to outpace that of 2019.”