Alberta housing market to moderate this year

Friday, January 9, 2015

According to the Alberta Economic Outlook Q1 2015 report, prepared by the ATB Financial Economics and Research group (ATB), housing investments in Alberta are projected to remain flat or slightly lower in 2015, despite record-setting levels of residential building permits in Q3 2014. Factors affecting this prediction include slower population growth, increased caution on the part of developers and home buyers, heightened investor nervousness, and a softer job and wage market.

As of October 2014, residential building permits reached over $1-billion (seasonally adjusted at annualized rates), nearing the all-time record. Despite this, the report suggests that in-migration from other provinces is expected to slow in 2015, sparking caution among builders about supply and demand.

The report suggests, however, that without rising interest rates expected in the near future, demand for new homes should continue to support a healthy, but moderated residential real estate sector. Over the last 12 months, the total number of residential and non-residential building permits was 4.3 per cent higher than in 2013. The non-residential construction sector remains the strongest segment in the region, particularly in downtown Edmonton and Calgary.

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