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New housing construction picks up in November

New housing construction picks up in November

Posted on: 12/11/2017 | Author: ATB Financial's Economics + Research Team

It’s a dream come true for many Albertans when they finally pick up the keys and walk into their brand new home for the first time. New housing construction is a great gauge of economic confidence—few purchases are ever as big as a new home.

In November of 2017, Alberta home builders started construction on just under 34,000 new units. (This figure is adjusted for seasonality, and is expressed as an annualized rate—in other words, it’s the number of homes that would be built in one year if the pace of activity in November kept up for 12 months). This includes both single detached homes and multi-unit residents such as row housing and condominiums.

Over the last complete 12 months, total housing starts are up 20 per cent from the previous 12 month period. That suggests home builders are seeing greater demand than they did in 2016.

Some of the rebound this year could be due to pent-up demand. During the dark days of the recession, many would-be new home buyers may have been leery about the state of the housing market. With better economic conditions gradually returning in 2017, some confidence in the market has returned, and that has lifted demand for new home construction.

Still, a glut of condominiums hangs over the real estate market, particularly in Calgary and Edmonton. The fact that more supply continues to come onto the market will likely prevent a recovery in price—great news for buyers, but not so great for those looking to sell.

Alberta housing starts, graph

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