Investment in new housing construction reached the second highest level on record in Alberta last October. Statistics Canada reports that investment totaled close to $1.1 billion, a 23 per cent increase from 2013.
Alberta easily beat out British Columbia and Ontario for the largest yearly increase in investment. B.C. saw new housing construction levels rise by 11 per cent, while Ontario experienced a five per cent expansion. Quebec posted the biggest decline in investment in new housing, down eight per cent.
Investment was up year-over-year for all building types in our province in October. Apartments and row housing led the charge, rising by an astounding 54 per cent and 41 per cent respectively over the previous year’s levels; whereas double-detached and single-detached construction intentions only increased 24 per cent and 13 per cent.
Cheaper mortgage lending rates have continued to support demand for new homes thus spurring greater investment in the housing sector. There is little concern about the prospect of interest rates rising within the next six months, meaning homebuilders should have little worry about higher rates destroying buyer demand. However, in spite of this, the residential sector is set to moderate in 2015. Slower population growth, cautious developers and a softer job market will impact the construction sector. In fact, building permits fell to just over 35,000 in December. As a result, a pullback in investment intentions in the residential construction sector is expected.
**Article courtesy of Todd Hirsch of ATB Financial. Thanks Todd!!