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Gabriella Makar, MBA
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Friday, October 28, 2011 - Alberta Housing Prices Flat

New home prices in Canada have powered past their pre-recession
peaks thanks largely to activity in Vancouver and Toronto. In contrast, prices in Alberta are still well below their peak sitting relatively flat for the better part of two years. The result is somewhat counter-intuitive given that the Alberta economy is outperforming the Canadian average by a wide margin.

The extent to which Alberta's housing sector boomed leading up
to the recession helps explain why new housing prices in the province are lagging other markets in Canada.

New home prices in Edmonton and Calgary exploded between 2005 and 2008, inducing a large expansion in the Alberta housing stock.

Assuming roughly 2.5 individuals per household, over the past decade
enough housing was built to accommodate about 950,000 people;
this is slightly higher than the increase in population, which was
720,000. This is a back of the envelope calculation, but a case can
be made that housing was slightly overbuilt during the boom and this is keeping a lid on price increases. This could turn around quickly however if migration picks up significantly — such is the lot of a boom/bust economy.*

*ATB Financial, October 28, 2011
Senior Economist Todd Hirsch

posted in General at Fri, 28 Oct 2011 17:16:59 +0000



Data last Updated: 2020-01-21 at 20:35:12 GMT America/Edmonton
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