Construction is one of the most important economic drivers in Alberta’s economy. Not surprisingly, a lot of attention is paid to indicators of building activity, especially around housing starts. Here, the most recent data give a bit of a mixed picture.
In December, construction got started on just under 30,000 new residential homes. That number is
adjusted for seasonality and is reported at an “annualized rate.” In other words, if the same pace of
housing starts continued for 12 months, there would be 30,000 new homes built in a year. This rate is
considerably below the 39,700 homes started in November, and one of the slowest months in 2012.
Alone, that single month of data might suggest that housing construction in the province is cooling.
However, seen from a longer perspective, a richer truth emerges. Through the entire year of 2012,
housing starts are up 30 per cent from where they were in both 2010 and 2011, returning close to the
record-setting years in the middle of the last decade.
As well, the overall housing market in Alberta remains remarkably balanced. With high wages, a
strong labour market, and a steady flow of inmigration to the province, housing demand
continues to strengthen. Other indicators, such as home prices and sales volume, paint a similar
Unlike the situation in Toronto or Vancouver (where there are clear signs of cooling), Alberta’s
housing market is not showing signs of bubbles bulding—or bursting.*
*Todd Hirsch, Senior Economist, ATB Financial