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Housing starts tumble to end 2018

Housing starts tumble to end 2018

Posted on: 2/7/2019 | Author: ATB Financial's Economics + Research Team

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After rebounding in November, housing starts dropped again in December. Home builders started construction on just over 19,000 new homes in the last month of the year, hitting the second lowest monthly total of 2018.

The figure is adjusted for seasonality and is expressed at an annualized rate. This is the total number of new homes that would be built in one year if the current pace were to continue for 12 months.

December’s total brings the average number of housing starts for last year to 26,242. The average number of new homes completed in 2018 was down by more than 10 per cent from the previous year.

This is another sign that Alberta’s economy is struggling to find traction. It’s true that Alberta’s economy has improved from 2015 and 2016, but many would-be home buyers are hesitant to make a purchase. Some have concerns about their employment situation; others about the future of borrowing costs. In response to a strong and growing economy in other parts of country, the Bank of Canada has raised its key lending rate five times since the summer of 2017.

Slower construction may bring good news for those with homes to sell, though, as it should help stabilize prices through 2019.

New vehicle sales, graph​​

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