Alberta’s economy is expected to improve in 2010 followed by more growth in 2011. Higher oil prices will see new projects starting. The natural gas industry will soften the expansion as a result of low natural gas prices. Overall, investment intentions in Alberta are projected to be higher by three per cent in 2010.
Labour market conditions are expected to improve this year as the economy gains traction.
The net losses from inter-provincial migration and non-permanent residents experienced in the latter part of 2009 are expected to moderate in 2010. International migration is expected to remain robust this year and next year. Net migration is expected to contribute to population growth in 2010 and 2011 which will support housing demand.
Single Starts: Single-detached starts bottomed in 2009 and are expected to rise in both 2010 and 2011. In 2010, starts will rebound, as builders respond to rising demand and lower inventories. Relatively low mortgage rates in 2010 and move-up buying will also help construction activity. Starts will move higher in 2011 with the expanding economy.
Multiple Starts: Multi-family starts will continue to be held back by a muted level of high rise apartment condominium construction. The number of complete and unoccupied multi-family units remains elevated but a peak should soon arrive with inventory levels expected to gradually decline over the forecast period. After a sharp reduction in multifamily starts last year, activity will increase in 2010 but remain modest. The recovery of multi-family starts will continue in 2011 supported by declining inventory levels.
Resales: Homebuyers responded to low mortgage rates and an improved economic outlook by rapidly increasing resale volumes in early 2010. Some demand has been brought forward by those consumers wanting to take advantage of current market conditions. By year-end, resale volumes in 2010 will be similar to the annual volumes in 2009, with single digit growth in 2011.
Prices: Growth in average existing home prices will moderate slightly in the third and fourth quarters of 2010 refl ecting more balanced market conditions due to modest sales and a rising supply of homes listed for sale. Average prices will grow by 3.3 per cent in 2011.
View the entire CMHC report here.