Alberta home builders brace for drop as big as 90% as pandemic drags on: CMHC

It’s been a rough few years for Alberta’s housing market. Add a pandemic to the mix, and the industry is reeling.

“We were battling with a tough economy to start with before the pandemic hit,” Morrison Homes president and CEO Dave Gladney said. “So it’s kind of a double whammy here in Alberta.”

“I would say volume is down about 30 to 40 per cent.”

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Less volume has meant less work for home builders.

Morrison Homes was faced with a tough choice: cut jobs or cut hours. After exploring all of the options, it chose not to eliminate any positions.

“We feel we have an A team and we didn’t want to lose any of our 60 employees,” Gladney added. “And we all agreed as a company to do this together.”

Canada’s housing agency said it expects home prices, sales and starts will decline substantially this year and possibly into 2022.

Canada Mortgage and Housing Corp. said in a special housing market outlook it expects a sharp decline in national housing starts of anywhere from 50 to 75 per cent this year, compared with pre-COVID-19 levels, before starting to rebound next year.

The numbers are even higher for Alberta.

“In the very near future we could see starts going down 60 to 90 per cent,” CMHC deputy chief economist Aled Ab Iorwerth told Global News.

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Ab Iorwerth said that prediction is very short term, although he couldn’t say when the industry might see a rebound — due to COVID-19 and low energy prices.

“We’re not expecting a rapid pickup. It depends what happens with the virus,” he added.

“The fundamental issue is just uncertainty and doubt over the future. What’s going to happen to oil prices in the medium- to long-term? What’s going to happen to the economy?

“So this sort of uncertainty you just expect people holding off.”

“It’s going to be a fairly tough situation in the near term.”

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Morrison Homes is moving ahead despite the uncertainty. It recently opened its sales centres and has implemented a number of safety protocols for customers and staff.

Gladney said he is pleased with the pickup in activity he’s seen lately.

“We’ve seen increased demand in our sales centres.

“And we’ve written more sales in the last 10 days than we’ve written in the last six weeks.”

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The CMHC report also predicted national home prices would decline between nine and 18 per cent, rising to as much as 25 per cent in oil-producing regions– like Alberta, before starting to recover by mid-2021.