Alberta has a record-setting number of empty new homes, but the Red Deer area is faring better than other areas of the province.
The builders’ industry group, BILD Alberta, reported the province had 5,366 unoccupied units in February, which was largely due to inventory levels in Edmonton. That city had 3,016 empty new units, a 32 per cent increase (743 units) from February 2018.
Meanwhile, the Red Deer area had 62 completed and empty units, a 26 per cent decrease (or 22 units) compared to February 2018.
Steve Bontje, BILD Alberta board chair and managing partner at Laebon Developments, said fortunately, Red Deer does not have the same amount of inventory as other cities, but that the local real estate industry continues to struggle.
“Things are very similar to what they were last year. There’s lots of uncertainty in people’s minds — economic and political and otherwise. We have to get through some of those things before people are comfortable making big decisions about purchases,” Bontje said.
“Mortgage changes have had a huge impact on people’s ability to purchase a new home, and we’re certainly feeling the affect of that in central Alberta, just like they are in Calgary and Edmonton.”
Red Deer and area saw a 15.4 per cent decline in housing starts in February compared to the same month in 2018.
“I know in Red Deer unabsorbed inventory is not a big deal, but the flip side of that is there also hasn’t been a lot of housing starts. There has then been job losses in Red Deer when new houses aren’t being built,” said BILD Alberta CEO Carmen Wyton.
BILD Alberta is calling on provincial election candidates to commit to creating an Alberta housing council to ensure the impact of policies and regulations are put through a cost-impact analysis.
Wyton said homeowners face costs from 10 government ministries, including transportation, municipal affairs and environment.
“Twenty-five per cent of the cost of every new home is being derived from taxes, fees, levies. There is every reason to believe if there aren’t checks and balances put in place, that the 25 per cent that we sit on now is going to go up and will go up exponentially.”
A housing council could also create an Alberta solution to restrictive mortgage rules and look at alternative financing options for infrastructure development for communities, she said.