Start me up: New home construction bounces back in July
Alberta housing starts jumped to a nine-month high while they took a breather nationally
By Siddhartha Bhattacharya, ATB Economics 22 August 2023 1 min read
New housing activity in Alberta picked up some steam in July after a slower start to the year. This, combined with the recent improvement in residential permits, provides an early, but encouraging sign that home building may be gaining some momentum during a period of record migration to the province.
Housing starts* surged to a 9-month high of 38,491 units (seasonally adjusted at an annual rate or SAAR) in July, a marked improvement from June’s modest reading of 26,581 units, primarily driven by higher multi-unit dwellings.
Keeping in mind that housing starts are one of the most volatile economic indicators, Alberta posted the largest monthly increase of any province in July.
However, even with the monthly gain, housing starts in Alberta have fallen over the first seven months of the year over the same time in 2022, by 16.5% to 30,559 units (SAAR).
Nationally, monthly starts fell by 10.1% in July and erased about one-third of the sharp increase seen in June. On a year-to-date basis, starts were down by 8.1% with Quebec (-40.3%) alone overshadowing gains posted in BC (+17.4%) and Ontario (+7.7%).
Despite headwinds such as labour shortages and elevated borrowing costs blowing against the construction sector, we expect population driven demand will keep housing starts above their current year-to-date pace, on average, for the rest of the year and into 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: The largest pumpkin grown in Canada weighed 2,537 pounds.
Today’s trivia question: According to the Canadian Real Estate Association’s Home Price Index, in what year did the benchmark price of a single-family home in Greater Vancouver pass the $1 million mark?