January Housing Starts In Calgary Down A Bit From 2012 Numbers

Posted by Alan Zunec on Wednesday, February 13th, 2013 at 1:04pm.

This past January saw fewer housing starts in Greater Calgary than seen in that same month in 2012. The Canada Mortgage and Housing Corporation released their report this past Friday noting that 719 units got their start in the area, compared to the 786 units started last January. Single family homes did see an increase with 441 units starting this past month compared to the 336 seen last year. Multi-family projects saw a noticeable drop with only 278 starts this year, compared to the 450 starts seen in January of 2012.

Senior market analyst from the firm’s Calgary office, Richard Cho, noted that housing starts in the city and surrounding region have been markedly stable since November of 2013. This is due to the decrease in multi family property starts being offset by an increasing demand for single family homes. Cho notes that the increase in net migration, the availability of jobs and an overall healthy economy have reduced the number of homes on the resale market, particularly in those single family properties.

That means less competition from the resale market, and thus more new properties going up. The multi family starts are down because there are fewer apartments going up. Row houses and semi-detached homes are in more stable territory. Cho expects that the total number of multi family starts for 2013 to be less than that seen during 2012.

Looking at housing starts on a national basis, the numbers are not at all impressive. Housing starts in January of this year decreased by 18.5 percent from those in January of 2012, with roughly160,000 starts seen across Canada.

BMO Capital Markets economist Robert Kavcic noted that this was the least number of housing starts seen since August of 2009. That was when Canada was inching out of the economic recession. Kavcic also noted that homebuilding numbers thus far are showing that 2013 may be a slow year in that respect.

TD Economics economist Diana Petramala backs that low housing start record to July of 2009. She also noted that it isn’t surprising that housing starts so far in 2013 are below numbers seen in 2012. Petramala noted that construction in the latter year was proceeding at a record pace which was unsustainable. The decrease of starts is healthy because the production is more in tune with what is needed. This both preserves inventory numbers and price points.

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