According to Canada Mortgage and Housing Corporation’s (CMHC) first quarter 2015 Housing Market Outlook, Prairies Highlights, report, housing starts in the Prairie region are projected to decrease from 55,067 units in 2014 to 49,600 in 2015 and 48,000 in 2016.
Within the Prairie region, Manitoba is projected to be the only province to buck this trend.
“Lower oil prices will have a dampening effect on investment and economic growth, particularly in Alberta and to a lower extent in Saskatchewan,” said Lai Sing Louie, CMHC’s regional economist for the Prairie and Territories Region. “This will contribute to slower employment growth and net migration, in turn slowing housing demand.
“With key drivers less supportive of housing demand and supply levels elevated in some markets, housing starts in the Prairie region are expected to decline in 2015 and 2016,” added Louie.
In Manitoba, housing starts will remain close to 2014 production and be relatively stable with 6,300 units in 2015 and 6,300 in 2016.
Housing starts in Alberta will decrease from 40,590 units in 2014 to 36,000 in 2015 and 34,500 in 2016. In Saskatchewan, housing starts will decrease from 8,257 units in 2014 to 7,300 in 2015 and 7,200 in 2016.
While the large number of migrants to the Prairie region over past years will support sales in the resale market, economic uncertainty created by declining oil prices will impact employment and temper demand.
In Manitoba, MLS® sales are projected to edge higher from sales of 13,782 in 2014 to 14,000 in 2015 and 14,200 in 2016 as employment growth increases. In Saskatchewan, MLS® sales are projected to decline from 13,868 in 2014 to 13,600 sales in 2015 and remain near this level in 2016. Alberta’s resale market will decrease from 71,773 in 2014 to 71,100 in 2015 before edging upward to 71,600 in 2016.
Manitoba’s average MLS® resale price is forecast to rise by 2.3 per cent from the 2014 level to $272,400 in 2015 and $278,800 in 2016 and $273,800 in 2015. Saskatchewan’s average resale price is forecast to rise slightly to to $302,500 in 2015 and to $307,800 in 2016. Alberta’s averages are expected to rise marginally to $407,100 in 2015 and $415,00 in 2016.