The markets for both new and resale housing in Alberta are likely to decline this year and next, said a federal agency. The decline will be led by single family homes, which will continue to feel the impact of rising construction-related costs, lower migration of people to the province, and a dramatic increase in resale listings, said Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp.
"The recent escalation in production costs will be a dominamt factor pushing single-detached housing starts lower, althought weaker net migration and a strong rebound in active resale listings will also contibute," he said.
Net migration is the inflow of people minus the outflow. Corriveau spoke to 650 delegates at the annual Housing Outlook Conference held recently at the Roundup Centre in the Stampede Grounds.
Following a record 31,835 construction starts of single-family homes in Alberta last year, there will likely be a decline of 12 per cent to 28,250 by the end of this year, says CMHC.
By the end of 2008, a further io-per-cent decline will bring the total down to 25,250 _ the lowest total in four year, it says.
"Fuelled by homebuyers seeking less expensive alternatives to the single-detachecd market, multi-family housing starts will climb to a 26 year high of 19,000 units this year," said Corriveau, adding that 2,000 fewer will be built in 2008.
Despite the expected dcline, the proportion of multi-family housing starts to total starts will likely hold at 40 per cent, the same as expected for 2007 and the highest proportion since 1982.
In terms of resale housing, a surge in activity in the firts half of this year will likely place this year's expected total of 74,000 sales close to last year's record of 74,350.
Sales peaked during the spring of this year as buyers bought in anticipation of further price increases and higher mortgage rates.
But it didn't work out the way.
"Since then, a surge in listings has slowed the rate of price growth considerably and buyers have become increasingly resistant to the recent runup in prices," said Corriveau. "Consequently, sales are now on a downward trend _ and in the face of weaker migration, this trend will continue in 2008, with sales falling five per cent to 70,000."
Following large double-digit price hikes for the past couple of years, price increases in Alberta's resale market are likely to slow in 2008, said Corriveau.
In 2006, there was a record gain of 31 per cent. It is expected to be followed by a 24 per cent jump this year _ most of that attributed to sales earlier in 2007 _ bringing the average price to $355,000.
Due to the number of active listings in the marketplace, combined with weaker demand, price growth in 2008will likely be limited to seven per cent, bringing the price to $379,000.
In Calgary, construction starts of single-family homes will likely slip to 7,250 in 2008, down from 8,000 this year, with the average price likely to climb to $550,000, up from this year's expected average of $475,000.
Meantime, multi-family construction starts will dip from 6,250 this year to 6,000 next year.
Construction of single-family homnes in Edmonton is expected to decline to 6,700 starts, down from this year's likely total of 7,800, while average prices will likely increase $60,000 in 2008 from this year's forecast of $440,000.
Multi-family construction is expected to decline to 5,700 units in 2008, down from this year's expected total of 6,750.
Wednesday, November 28, 2007
Hot Properties "VACATION", published: November 24, 2007
Almost brand new and only a block off one of Alberta's best beaches, this $439,900 listing in Sylvan Lake was built in 2006, but it has a real cottage feel to it with stone pillars and a verandah out front and vaulted ceilings inside.
The two-storey has 1,456-square feet of space with a large master bedroom on the main floor. The ensuite has a jetted tub.
The stylish kitchen has dark maple cabinets, stainless steel appliances, black granite countertop and bamboo flooring.
There are three more bedromms upstairs, ample room for all the guests you you get when you purchase this resort town home.
MLS#269895
_Compiled by Michele Jarvie, Calgary Herald
The two-storey has 1,456-square feet of space with a large master bedroom on the main floor. The ensuite has a jetted tub.
The stylish kitchen has dark maple cabinets, stainless steel appliances, black granite countertop and bamboo flooring.
There are three more bedromms upstairs, ample room for all the guests you you get when you purchase this resort town home.
MLS#269895
_Compiled by Michele Jarvie, Calgary Herald
City housing market to cool published: Friday, Nov.2, 2007
CMHC predicts drop in housing starts and existing home sales provincewide in 2008.
Red Deer's housing market will lose some of its sizzle in 2008, predicts Canada Mortgage and Housing Corp.
The national housing agency is forecating a decline in both residential construction starts and sales of existing homes in the city next year _ a trend expected to occur provincewide.
CMHC is projecting that the number of housing starts in Red Deer will reach 1.700 this year. Of these, a record 1.0125 will be single-detached homes, with 575 to be units in multi-family projects.
These figures are up from 2006, when there were 1.095 single-detached starts and 334 multi-family starts for a total of 1.429.
For next year, CMHC expects 1.525 housing starts in the city: 1.050 single-detached and 475 multi-family. That would represent a 17 per cent decrease in multi-family housing starts and a 10.3 per cent decline overall.
"The reason for the drop-off in multi-family starts is most likely due to the lower net migration we're seeing across the province," said Lindsay Kendall, CMHC's market analyst for the Prairie and Territories region.
Speaking from Edmonton, where CMHC was conducting its annual Alberta housing outlook conference on Thursday, Kendall explained that newcomers tend to rent or buy lower-priced homes in multi-family buildings. So as their numbers decline, so does the incentive for developers to invest in such projects.
Kendall said Alberta has been drawing many people from Saskatchewan and British Columbia, but with a strengthening of the economies in those provinces, people there are staying put. And those who previously moved to Alberta might be tempted to return to their home provinces.
Relative to other mid-sized cities in Alberta, Red Deer is probably less afected by this phenomenon, said Kendall. That's because of its desirable location between Calgary and Edmonton.
"We're seeing a strong population growth as well as employment growth, especially with full time job creation, which is supporting this strong housing demand."
As for the resale market, CMHC anticipates that 2007 will end with a total of 5.400 multiple Listing Service sales of residencial properties in Red Deer. The average price of these will be $204,977.
The high 2007 sales volumes have been fueled by a scarcity of residential land in Red Deer, which is pushing buyers into used market. Also boosting sales have been the high selling price, which attracted a lot of homes onto the market.
Looking forward, CMHC expects MLS sales to decline slightly to 5.350 transactions in 2008. But the average selling price should continue to climb, reaching $297,500 next year.
The decline in MLS sales in Red Deer next year is expected to be one of the smallest decreases in the province, said Kendall. She pointed to the city's advantageous location as a big reason for this.
"It's been a destination of choice for migrants entering into the province, so you'll still see that strong housing demand."
Red Deer's housing market will lose some of its sizzle in 2008, predicts Canada Mortgage and Housing Corp.
The national housing agency is forecating a decline in both residential construction starts and sales of existing homes in the city next year _ a trend expected to occur provincewide.
CMHC is projecting that the number of housing starts in Red Deer will reach 1.700 this year. Of these, a record 1.0125 will be single-detached homes, with 575 to be units in multi-family projects.
These figures are up from 2006, when there were 1.095 single-detached starts and 334 multi-family starts for a total of 1.429.
For next year, CMHC expects 1.525 housing starts in the city: 1.050 single-detached and 475 multi-family. That would represent a 17 per cent decrease in multi-family housing starts and a 10.3 per cent decline overall.
"The reason for the drop-off in multi-family starts is most likely due to the lower net migration we're seeing across the province," said Lindsay Kendall, CMHC's market analyst for the Prairie and Territories region.
Speaking from Edmonton, where CMHC was conducting its annual Alberta housing outlook conference on Thursday, Kendall explained that newcomers tend to rent or buy lower-priced homes in multi-family buildings. So as their numbers decline, so does the incentive for developers to invest in such projects.
Kendall said Alberta has been drawing many people from Saskatchewan and British Columbia, but with a strengthening of the economies in those provinces, people there are staying put. And those who previously moved to Alberta might be tempted to return to their home provinces.
Relative to other mid-sized cities in Alberta, Red Deer is probably less afected by this phenomenon, said Kendall. That's because of its desirable location between Calgary and Edmonton.
"We're seeing a strong population growth as well as employment growth, especially with full time job creation, which is supporting this strong housing demand."
As for the resale market, CMHC anticipates that 2007 will end with a total of 5.400 multiple Listing Service sales of residencial properties in Red Deer. The average price of these will be $204,977.
The high 2007 sales volumes have been fueled by a scarcity of residential land in Red Deer, which is pushing buyers into used market. Also boosting sales have been the high selling price, which attracted a lot of homes onto the market.
Looking forward, CMHC expects MLS sales to decline slightly to 5.350 transactions in 2008. But the average selling price should continue to climb, reaching $297,500 next year.
The decline in MLS sales in Red Deer next year is expected to be one of the smallest decreases in the province, said Kendall. She pointed to the city's advantageous location as a big reason for this.
"It's been a destination of choice for migrants entering into the province, so you'll still see that strong housing demand."
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