Housing starts will decline in both Alberta and Saskatchewan, while remaining stable in Manitoba this year and next, says a new report from Canada’s national housing agency.
Starts totaled 55,067 units across the Prairie provinces in 2014, but the Canadian Mortgage and Housing Corporation (CMHC) says those numbers will decline and range from 43,400 to 49,500 in 2015, and between 38,900 and 46,300 in 2016.
“Demand for housing is expected to moderate as the oil price shock works its way through the economy,” said CMHC economis Lai Sing Louie in a release. “Low energy prices continue to dampen the outlook in the oil and gas industry as companies reduce capital expenditures and downsize demand for labour and services. This will continue to contribute to slower employment growth and net migration in energy driven economies like Saskatchewan and especially Alberta.”
In Alberta, housing starts totaled 40,590 in 2014, but are forecast to decline and range from 31,900 to 36,500 units in 2015, and between 27,700 and 33,300 in 2016. This weakening demand, says the CMHC, will continue to lower resale transactions in Alberta. After increasing to 71,773 in 2014, MLS sales in the province will decline and range between 52,000 and 60,500 in 2015, and between 52,700 and 61,500 in 2016. Alberta’s average resale price in 2014 was $400,590. With many markets favouring the buyer, that number is expected to land between $366,600 and $402,000 in 2015, and between $360,400 and $409,500 in 2016.
In Saskatchewan, housing starts totaled 8,257 units in 2014, but are expected to decline this year, ranging between 5,900 and 6,700 units. In 2016, the CMHC says the total will be between 5,900 and 6,900. Home sales are also expected to fall in Saskatchewan this year and next. In 2014 some 13,868 homes change hands across the province, but the total is expected to fall between 11,300 and 13,100 this year, and 11,400 and 13,300 in 2016. Last year the average resale price was $298,359, but because supply levels are elevated relative to demand, the CMHC predicts the average price will range between $282,000 and $304,500 in 2015, and $279,000 and $315,400 in 2016.
In Manitoba, housing starts should remain relatively stable from 6,220 units in 2014 to somewhere between 5,500 and 6,200 units in 2015, and 5,400 to 6,200 in 2016. Meanwhile, stronger employment growth, higher earnings, and continued elevated net migration to Manitoba will help keep sales relatively steady. The CMHC says after 13,782 homes changed hands in 2014, sales are projected to range between 12,900 and 14,700 this year, and between 12,800 and 14,900 next year. And while supply is elevated in Manitoba, demand is expected to also remain steady. The average MLS price is expected to range between $258,600 and $276,400 in 2015, and $260,100 and $287,100 in 2016.
For a look at the national forecast, our earlier coverage is here.