Last month, there were just over 43,000 new housing starts throughout the province. That figure is seasonally adjusted and at an annualized rate—that is, it estimates the number of new houses that would be built over an entire year if the pace of construction in October was to be maintained for twelve months. October’s figure is down slightly from September, but the longer-term trend in housing starts has been strong. Since the end of October 2013, housing starts are up almost 17 per cent compared to the previous 12-month period.
Several factors in Alberta continue to push housing starts higher. With solid employment opportunities and high wages, Alberta continues to draw in thousands of workers from other provinces and around the world. That growing population needs places to live.
Another factor is the rising cost of rental accommodation. With only a fixed number of houses or apartments for rent but growing demand, vacancy rates around the province are low. This has pushed up rents and made home ownership a relatively more attractive alternative.
The third factor is continued low interest rates. For over four years, the Bank of Canada has kept its trend-setting overnight rate at a low one per cent—and that has helped maintain favourable mortgage rates. The low cost of borrowing money has pulled more Albertans into home ownership and increased the demand for new homes.