Hammers were swinging and table saws whirring in Alberta last month as residential construction hit the reverse switch on its recent slowdown. Housing starts throughout the province rebounded to
just above 33,000* in September. This broke a bit of a downward trend in housing starts since reaching a peak in April of this year. Over the past two years, housing starts in the province have averaged about 29,000 per month.
The uptick in demand for new homes in Alberta comes at the same time as a bit of softening nationally. Throughout the country, housing starts tumbled slightly from 225,000 in August to 220,000 in September. But even that figure is above the two-year average of 208,000.
Changes to the Canada Mortgage and Housing Corporation lending requirements—especially the
lowering of the maximum amortization from 30 to 25 years—has tapped the brakes of the residential
housing market since coming into effect in the summer. The rise in Alberta’s housing starts in September speaks to the resilience of consumers and the strength in demand. If the CMHC had not imposed their changes, it is very likely Alberta housing starts would have been even stronger.
* That figure is annualized, which means it estimates the number of homes that would be built
in a year if the same pace of construction continued for 12 months. It includes homes built in
all areas of the province and is adjusted for seasonality.*
*Courtesy of Todd Hirsch, Senior Economist, ATB Financial