Home construction slides

By Harley Richards

There are a variety of words that could be used to describe the slowdown in Red Deer’s residential construction sector.
Regine Durand chooses “correction”.
A market analyst with Canada Mortgage and Housing Corp. In Calgary, Durand acknowledges that the decline in housing starts this year has been substantial.
The 426 single-detached and multi-family units started during the first nine months of 2008 represent a 67 per cent drop from the 1297 units started during the same period last year.
The figure is 58 per cent lower than Red Deer’s five-year average of 1004 starts and down 51 per cent from the 10 year average of 874 starts.
But Durand sees reason for optimism.
She pointed out that the inventory of new, single-detached homes in the city awaiting buyers at the end of September numbered 85 – down from 107 the preceding month.
Meanwhile, the number of listings on Red Deer’s resale market in September was 268, as compared with the 598 active listings a year earlier.
“its good news,” said Durand. ‘It means that the market is absorbing more units”.
By 2009, she continued, the surplus inventory of new and used homes on the market should disappear and demand for new construction will rise.
Encouraging this will be the moderation of house prices.
Members of the local homebuilding industry agree that business has slowed, but they also characterize the situation as a “correction”.
“It looks like things will pick up again in 2009,” said Scott Boyd, executive officer with the Canadian Home Builders’ Association, Central Alberta branch.
Gord Bontje, president of Laebon Homes, is also anticipating better times.
He notices improved sales in August and said that trand has continued.
“Two weeks ago was our best sales week in a couple of years,” Bontje said.
Thare have been cutbacks in staffing, said Boyd and Bontje, but they think this reflects the fact many companies boosted their payrolls in 2006 and 2007 to keep pace with demand.
“Thas was the abnormal piece,” said Bontje, describing how his company sent its human resources manager to the Maritimes and looked into bringing foreign workers to Canada in its efforts to add people.
“I think today is kind of the way it should be”.
Laebon’s current payroll – about 110 – is about the same as it was before the building boom hit, he said.
Jonas Neidert, president of the local branch of the Canadian Home Builders’ Association, agreed with Bontje’s assessment.