Housing starts in Alberta alive but not exactly kicking
With Alberta’s economy doing much better than it was during the lockdown, the rebound in housing starts should continue
By ATB Economics 13 August 2020 1 min read
Home building activity in Alberta picked up in July, but remains relatively low.
The number of seasonally adjusted housing starts in June fell to their lowest level since October 1991, but rebounded by 52 per cent in July.
Unfortunately, starts in the province were still down by 22 per cent compared to July 2019 and by 12 per cent over the first seven months of 2020 versus the same period last year.
The situation is markedly different in central Canada.
Despite falling to zero in April in the face of public health measures, starts in Quebec were up by 21 per cent on a year-over-year basis in July and by 6 per cent over the first seven months of 2020.
In Ontario, year-over-year starts were 21 per cent higher in July with the province posting a solid 15 per cent increase over the first seven months of the year compared to the same period in 2019.
British Columbia is the only province with a slower pace of new home construction than Alberta. Housing starts in B.C. over the first seven months of 2020 were 24 per cent below where they were the year before.
With Alberta’s economy doing much better than it was during the lockdown, the rebound in housing starts should continue. At the same time, sluggish population growth, high unemployment, the ongoing negative economic effects of the pandemic, and muted activity in the oil patch will weigh on the pace of new home construction in the province.
Please note that there was a typo in yesterday’s Owl. Oil and gas capital spending in 2020 will be $22.8 billion below the 10-year average not $228 billion.