Housing starts decline so far in Calgary and across Alberta in 2023 – Calgary

Housing starts across the province have declined in the most recent quarter compared to the same period last year, and Calgary is no exception, as housing demand continues to outstrip supply in the city.

According to data from the Canada Mortgage and Housing Corporation (CMHC), housing starts between January and July were down 18.8 per cent compared to the same period last year.

In Calgary, housing starts fell about 3.8 per cent between January and July.

The situation was highlighted in the provincial government’s quarterly financial update report last week, which noted that housing construction activity “failed to gain ground this year” and that “builders in ‘housing has been slow to respond’ to the province’s projected 4.5 per cent increase in construction. population this year.

“Because we have a low supply scenario, which tends to put upward pressure on prices, and we continue to see prices increase against all types of properties,” said Ann-Marie Lurie, economist in head of the Calgary Real Estate Board, to PKBNEWS.

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“I don’t think that can really change until we see better balances between supply and demand. So either the demand has to go down or the supply has to improve.

As a result, the province now expects housing starts to average 31,000 units in 2023, down from the 38,000 projected in Budget 2023 and last year’s annual rate of 36,500 units.

Housing starts are expected to rebound to an average of 32,500 units next year, according to the province’s financial update.

According to the Calgary Construction Association (CCA), several factors explain the decline in housing starts so far this year.

“The industry is facing a number of factors,” CCA President Bill Black told PKBNEWS. “To land on just one would be to oversimplify it.”

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Black said there is an affordability issue with rising construction costs, including higher interest rates, and the ability to “build up to the volumes needed to meet demand.”

He also pointed out that the situation is aggravated by the effects of a long-term labor shortage in the construction sector.

“The average time to build a house has increased by 60 to 70 percent, and even more in some cases,” Black said. “It’s not because people are working slowly, it’s because the house is idle and waiting for the next step from the specialist contractor so they can show up and do their job.”

Black said CCA has heard there’s been a slowdown in the availability of serviced land in new communities, which has also contributed to the situation.

The opposition NDP is calling on the province to form a committee to look at the factors behind the housing crisis, including measures to ease affordability.

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“We need to look at rents, we need to look at supply, we need to look at a series of measures,” said NDP Housing Critic Janis Irwin. “The anecdotal data clearly shows that this will require the implementation of a series of solutions if we are really to end the housing crisis.”

In a statement to PKBNEWS, the province pointed to a 3.5 per cent increase in residential construction investment in June, as other provinces saw similar declines in investment.

“The Government of Alberta is working to find creative and innovative solutions that encourage new investments in housing,” Seniors, Community and Social Services Minister Jason Nixon said in a statement. “Calgary is also experiencing the highest number of purpose-built rental units on record. »

Next week, Calgary City Council is due to debate a newly revamped housing strategy that will include recommendations aimed at improving housing affordability in the city.

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In a written statement, Ward Council 8. Courtney Walcott highlighted the “uncertainties” of building more housing, “particularly around the diversity of housing we need across all wards.”

“Calgary’s housing strategy proposes to reduce barriers to building through zoning reform, speeding up the affordable housing approval process and increased collaboration between the homebuilding industry, our social services and the city,” Walcott said.

“The city cannot control the number of housing units built, but we will make it easier. »

According to the City of Calgary, the number of building permits issued by the city between January and April was lower than the previous two years, but the number was higher than the previous two years during the months of May, June and August. .

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