Excerpt from CMHC Housing Outlook Conference Calgary November 2012
By Lai Sing Louie
According to CMHC, the pace of economic growth in Alberta is moderating but will remain above the national average. Following a 5.2% gain in 2011, expect the economy to expand by 3.1 and 2.9 percent in 2012 and 2013. Global economic uncertainty and stable growth in the US, will slow the gain in Alberta’s energy exports. The value of Crown Land Sales, a leading indicator of drilling activity, is substantially lower this year and will lead to less drilling in 2013. On the positive side, oil sands development will remain a major driver of investment, supporting economic growth. The economy will also be propelled by consumer spending, which is expected to increase into 2013.
Moderating economic growth will ease employment growth next year but will keep the unemployment rate below 5%. Economic opportunity in Alberta has been a draw for migrants. Interprovincial migration is expected to show large gains through 2012 as unemployed workers move to take advantage of employment opportunities. Also supporting migration is international migration and a rise in temporary foreign workers, those from outside the country helping to address local labour needs. Overall, net migration is projected to rise from 45, 039 in 2011 to 66,500 in 2012 and remains elevated at 49,500 in 2013. Migration inflows will be lower next year but supportive of housing demand.
In Alberta, housing starts are projected to rise 26% to 32,400 units in 2012 and then moderate to 31,200 in 2013. Single detached starts are projected to rise by 15% in 2012 to 17,500 units and remain near this level in 2013. While construction has moved higher this year, the number of units accumulating in inventory has decreased from last year. In 2012, single detached builders have been able to increase production to meet demand without significant additions to inventory.