Alberta House Price Developments

A report from the Edmonton Journal.

“Edmonton home prices dropped an average of 6.5 per cent in November from October. Edmonton house prices now are down $50,000 from their May peak of $426,028. The volatile mixed category of duplexes and rowhouses plummeted 15.4 per cent to $311,193. ‘The current market is very price-sensitive,’ Carolyn Pratt, president of the Realtors Association of Edmonton, said today. ‘If property is not priced right for this market, it may languish in the listings.’”

“Edmonton-area housing starts fell to 1,091 units in November 2007, down 42.1 per cent from November 2006. ‘Builders have been reacting to concerns about the size of new and resale inventories and their impact on prices,’ said Richard Goatcher, senior market analyst at Canada Mortgage and Housing Corp., which released the figures.”

“‘Overall, the Canadian housing sector continues to outperform expectations, and is in stark contrast to its U.S counterpart where the recession in the housing sector continues unabated,’ said TD Securities strategist Millan Mulraine.”

“However, the signs of economic strength and optimism were released as Bank of Canada governor David Dodge was warning that the credit crunch has intensified, adding to the risk posed by the weakening in the U.S. economy, of an economic downturn.”

“‘These tighter credit conditions have come as financial market difficulties have intensified over the past few weeks and as bank-funding costs have increased globally,’ Dodge said. ‘At the same time, there is an increased risk attached to the prospects for demand for Canadian exports because the outlook for the U.S. economy, particularly the U.S. housing sector, has weakened.’”

From the Calgary Sun:

“Despite a plunge in housing starts in the region, experts say Calgary’s economic boom is far from over. The federal housing agency, the Canada Mortgage and Housing Corporation, reported a 48% drop in housing starts between last month and November, 2006.”

“Total housing construction in Calgary is so far down by 17% this year over last. Last month, 776 homes were started in the Calgary area, down from 1,497 the previous November.”

“Even so, the pace of construction remains hectic, said Deep Shergill, president of the Calgary Region Home Builders Association.”

“‘Most of the builders are still building at or near capacity,’ said Shergill, adding the sector’s labour squeeze continues. ‘There’s just no way we could maintain that kind of pace we’d seen.’”

“Multi-family housing starts in the city dropped a whopping 76% last month compared to November, 2006.”

“Lai Sing Louie, a senior analyst with the CMHC, said some of the overall slowdown is caused by more used listings diverting buyers. ‘There’s still lots of supply in the re-sale market,’ he said.” “In Alberta’s seven largest centres, housing starts in November, 2007, were down 38% from the same month last year.”