October was a much slower month for homebuilders across the province.
A report released by Canada Mortgage and Housing Corp. on Thursday said overall starts in October were down 28 per cent in the Calgary region, off by 40 per cent in the Edmonton region and declined by 40 per cent across the province.
Calgary saw decreases of 29 per cent in the single-detached market and 27 per cent for all other housing categories. Edmonton’s declines were 26 per cent for single-detached and 54 per cent for all others.
Alberta’s decreases were 30 per cent for single-detached and 48 per cent for all others.
“The housing starts trend in Calgary decreased in October from last month. The pull back in new construction was largely driven by lower apartment starts, as inventory levels for apartment units remain elevated. However, on a year-to-date basis, total housing starts in October were three per cent above last year at this time,” said the CMHC in describing its seasonally-adjusted annual rate trend measure.
The agency said the trend in Canada of 206,171 units in October, compared to 207,809 units in September 2018.
“The national trend in housing starts declined for a fourth consecutive month in October, which leaves the trend at its lowest level since February 2017,” said Bob Dugan, CMHC’s chief economist. “However, despite declining for several months, the trend remains slightly above its long-run average because it follows historically elevated levels of activity in 2017.”
Sal Guatieri, senior economist with BMO Capital Markets, said “Canada’s housing market continues to stabilize after getting dinged by tougher mortgage rules earlier this year, and remains healthy despite higher interest rates.”
Rishi Sondhi, an economist with TD Economics, said “modest demand growth should keep a lid on Canadian homebuilding during 2019 and 2020, implying less thrust from what was once a steady contributor to economic growth. Still, the likelihood of a steep downturn in homebuilding is remote, given that Canada’s population is on the rise, the economic backdrop is decent and that markets are generally not overbuilt.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.