Housing starts rise in May

BY ADVOCATE STAFF Construction starts on single-detached homes in Red Deer slipped in May, as compared with the same month in 2013.

BY ADVOCATE STAFF

Construction starts on single-detached homes in Red Deer slipped in May, as compared with the same month in 2013.

But the decrease was more than offset by increased activity in the multi-family category.

Canada Mortgage and Housing Corp. reported on Monday that work commenced on 69 homes in the city during the past month, up from 66 starts in May 2013.

Single-detached projects accounted for 48 of last month’s tally, down from 53; while multi-family units numbered 21, up from 13.

During the first five months of 2014, local builders have combined for 419 residential construction starts — including 164 single-detached homes and 255 multi-family units.

The January-to-May total last year was 364, made up of 164 singles and 200 multi-family homes.

Among Alberta’s seven largest urban centres, Red Deer was the only community to post a year-over-year increase in May.

Housing starts in the Calgary and Edmonton metropolitan areas were down, as was the case in Grande Prairie, Lethbridge, Medicine Hat and the Regional Municipality of Wood Buffalo.

However, on a year-to-date basis to the end of May, Calgary and Medicine Hat — like Red Deer — are both up from 2013. Edmonton, Grande Prairie Lethbridge and Wood Buffalo were lower.

On a national basis, CMHC reported a 0.8 per cent gain in May.

However, economists say the housing market can’t sustain such a pace for much longer, given that by most indicators — from prices, to affordability, to home ownership rates to household debt — the sector appears to be at the top of its cycle.

“There are still many signs that the Canadian housing market may be moderately overbuilt. The number of condos for sale in the existing home market has increased considerably faster than demand in (many cities).

Meanwhile, the number of new homes under construction is at an all-time high,” said TD Bank economist Diana Petramala.

The biggest gains in May came in urban single-unit starts, which rose 5.4 per cent, while multiples dipped 0.8 per cent and rural starts fell by 3.8 per cent.

There was also a significant regional disparity in the data, with a huge leap in the Atlantic provinces (82.3 per cent), and more modest increases in Quebec and British Columbia.

Tempering the gains was a 15.7 per cent pullback in the Prairies and a mostly flat reading in Ontario.

The overall increase helped elevate the six-month moving average for the seasonally adjusted annual pace to 184,438 starts, as compared with 183,872 in April.

For the past two months, however, starts have averaged almost 198,000, which represents a 13 per cent increase from the first three months of the year and well about what is considered as the underlying rate of household formation in the country.

While the market has slowed somewhat from the torrid pace it set a few years back, most analysts believe there is more retrenching ahead as the economy recovers and interest rates start heading higher.

Still, the last month or so has seen mortgage rates declining rather than rising, as banks seek to attract a bigger share of what is perceived to be a shrinking pool of buyers.

Both Scotiabank and the Bank of Montreal recently made news by dropping their five-year fixed rate offerings below three per cent.

In past years, the federal government had expressed concern at such low borrowing costs, even intervening in one celebrated occasion, but Finance Minister Joe Oliver has signalled that Ottawa does not intend to weigh in.

With files from The Canadian Press.

Just Posted

WATCH: Property taxes in Red Deer will go up 2.02 per cent in 2018

City council passes a “tough” budget that maintains most service levels

Red Deer councillor balks at city getting stuck with more provincial funding responsibilities

Volunteer Central seeks municipal funding after being cut off by FCSS

Olds chicken barn burns to the ground, no livestock harmed

More than 100,000 chickens were saved as fire crews prevent the blaze from spreading

Bear video meant to promote conservation: zoo owner

Discovery Wildlife Park says it will look at other ways to promote its conservation message

Red Deer’s Soundhouse closing its doors on Record Store Day

The owners of The Soundhouse want to shut down their store on… Continue reading

NorAm Western Canadian Cross Country Ski Championships begin in Red Deer

The biggest cross-country skiing competition in Red Deer’s history is underway. Nearly… Continue reading

In photos: Get ready for Western Canadian Championships

Haywood NorAm Western Canadian Championships and Peavey Mart Alberta Cup 5/6 start… Continue reading

WATCH: Red Deer city council debates cost-savings versus quality of life

Majority of councillors decide certain services are worth preserving

Got milk? Highway reopened near Millet

A southbound truck hauling milk and cartons collided with a bridge

Stettler’s newest residents overcame fear, bloodshed to come here

Daniel Kwizera, Diane Mukasine and kids now permanent residents

Giddy up: Red Deer to host Canadian Finals Rodeo in 2018

The CFR is expected to bring $20-30 million annually to Red Deer and region

Ice dancers Virtue and Moir to carry flag at Pyeongchang Olympics

Not since Kurt Browning at the 1994 Lillehammer Games has a figure… Continue reading

Beer Canada calls on feds to axe increasing beer tax as consumption trends down

OTTAWA — A trade association for Canada’s beer industry wants the federal… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month