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Calgary area housing starts fall 21 %

Housing starts in the Calgary Census Metropolitan Area fell by almost 21 per cent in 2007 compared with the record-breaking year in 2006.

Preliminary figures released today by Canada Mortgage and Housing Corporation said the annual total for housing starts in the Calgary CMA was 13,505 units, down from the 17,046 recorded in the previous year.

The biggest decline was felt in the single-detached market where starts dropped by 25.8 per cent - 7,777 last year, 10,482 in 2006. In the multi-family market, the yearly decline was 12.7 per cent to 5,728 in 2007 from 6,564 in 2006.

For the month of December alone, overall housing starts plunged by 60 per cent to 601 units from the 1,499 units that were started in December 2006. Single-detached starts declined by almost 40 per cent last month, from 651 units in December 2006 to 392 units in December 2007. This represents the lowest level of production for any December since 1995. Also multi-family starts dropped by more than 75 per cent last month from 848 in December 2006 to 209.

"Single detached starts have been lower for each and every month in 2007 compared to the same month a year earlier," said Lai Sing Louie, senior market analyst in Calgary for the CMHC. "A high level of supply in the resale market has been competing with new home sales and this will likely continue into 2008."

He said the "the rapid rise in condominium prices will need to be digested by consumers as will the record number of apartment condominium units under construction."

With condominium sales pulling back in the resale market and net migration to Calgary dropping, the high level of multi-family supply will need to be monitored.

"Considering these factors and the likelihood of higher inventories, multi-family starts in 2008 will likely be less than 2007's production," said Louie.

Housing starts in Alberta's seven largest centres totalled 1,678 units in December, down over 36 per cent from a year earlier. For the year, overall starts in the province are down by 5.9 per cent to 40,882 units.

Nationally, urban starts in December totaled 11,176 units, a decrease of about 20 per cent from December 2006. Throughout Canada, housing starts in 2007 are estimated at 229,600, surpassing 2006 starts, and reaching their second highest level in nearly two decades.

Source: Calgary Herald (Wednesday, January 09, 2008)
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