After a brisk start to 2010, residential construction activity in Red Deer has lagged behind last year’s pace for the past four months.
Statistics released by Canada Mortgage and Housing Corp. on Friday showed that there were 34 housing starts in the city during September: 26 single-detached and eight in the multi-family category. The combined figure is less than half the tally for September 2009, when there were 37 single-detached and 42 multi-family starts for a total of 79.
Red Deer’s 57 per cent drop in building from September 2009 to September 2010 was the greatest among Alberta’s seven largest urban centres. Grande Prairie and Lethbridge were down 55 and 35 per cent respectively, while Calgary, Edmonton, Medicine Hat and the Regional Municipality of Wood Buffalo all recorded more starts this September than in the same month a year ago.
Despite its second-half slowdown, residential construction in Red Deer was still up 36 per cent for the first nine months of 2010 — from 345 starts to 469.
Edmonton saw the biggest nine-month increase in housing starts from 2009 to 2010, at 142 per cent. Calgary was next at 90 per cent, followed by Medicine Hat at 40 per cent. Grande Prairie was down three per cent, while Lethbridge and the Regional Municipality of Wood Buffalo both slid 14 per cent from 2009 to 2010.
Among smaller municipalities with more than 10,000 people, the Town of Lacombe had 114 housing starts during the first three quarters of 2010, a 160 per cent increase over the same period in 2009. Sylvan Lake had 90, up 70 per cent; Mountain View County posted 36 starts, a 16 per cent decline; Red Deer County had 42, which was 22 per cent lower than in 2009; and Lacombe County reached 22, a 60 per cent drop.
Across Alberta, municipalities with a population of more than 10,000 people combined for 19,084 housing starts from January to September, a 70 per cent jump over the same period last year.
Canadawide, there was a decline in housing starts in September, said CMHC. it calculated that there were a seasonally adjusted 186,400 starts last month, as compared with 189,300 in August.
Bill Clark, a senior economist with CMHC, said the decline reflects a more sustainable level of construction.
“It’s actually quite good because they’re coming more in line with overall demographic demand in Canada,” said Clark.
Many consumers rushed into the housing market during the last quarter of 2009 and the first quarter of 2010 to beat expected increases in mortgage rates, sales taxes in three provinces and tighter federal rules for mortgage qualifications.
Clark notes that while mortgage rates have moved gradually higher in recent months, they are still near historically low levels — though not at the levels recorded earlier this year.
Bank of Montreal economist Robert Kavcic said the level of September starts was slightly better than expected, but the downward trend in Canadian construction remains clear.
“Starts should continue to soften in the next few quarters, pulled down by the cooling we’ve seen on the demand side of the housing market,” Kavcic said.
Urban starts decreased most in Atlantic Canada and Ontario, but were up in British Columbia, Quebec and the Prairie region.
With files from The Canadian Press.