Housing construction moderated in the first half of 2023
Housing starts in Alberta were down by 18.3% over the first six months of the year compared to the same period in 2022
By Siddhartha Bhattacharya, ATB Economics 19 July 2023 1 min read
Alberta’s home building momentum pulled back in June after a spike in May.
Housing starts* fell from a 7-month high of 36,415 units (seasonally adjusted at an annual rate or SAAR) in May to a 17-month low of 26,299 units (SAAR) in June.
Note that despite being adjusted for seasonality, housing starts are one of the most volatile economic indicators reported at a monthly frequency.
Averaging at 29,196 units (SAAR) over the first six months of the year, housing starts in Alberta were down by 18.3% from the same period in 2022 and about 3.9% lower than 2021 levels.
The year-to-date (YTD) story was similar nationally with activity down in six other provinces, led by Quebec (-41.9% YTD), relative to last year.
There are a lot of factors at play when assessing the impacts on new home construction both in Alberta and Canada. The construction sector continues to be plagued by labour shortages with job vacancies on the rise since the end of 2020 and holding close to a multi-year peak at the first quarter of 2023.
In addition, rising interest rates have clearly been weighing on residential construction intentions across the country but Alberta’s surging population levels are expected to cushion some of that weakness in the coming months.
We expect housing starts in Alberta to average 31,900 units this year in our latest economic outlook report, moderating from the seven-year peak reached last year before improving to 37,100 units next year.
*A housing start is defined as the beginning of construction work on the building where the dwelling unit will be located. This can be described in two ways: 1) the stage when the concrete has been poured for the whole of the footing around the structure; or 2) an equivalent stage where a basement will not be part of the structure.
Answer to the previous trivia question: After adjusting for ticket price inflation, 1939’s “Gone with the Wind” holds the record for the highest box office gross.
Today’s trivia question: How many Albertans lived alone in 2021?