Alberta is expected to be among Canada’s economic growth leaders. Real GDP is projected to increase by 2.1 per cent in 2013 and 3.1 per cent in 2014. Higher oil prices and a narrowing differential between the price of West Texas Intermediate and Western Canadian Select are supportive of the energy industry. Exports are projected to rise, as is investment, driven primarily by energy. At the same time, expenditures related to flood remediation in Southern Alberta will continue to provide a boost to the economy. Consumer spending will continue to increase as well, supported by population growth and a labour market generating rising wages.
Alberta’s growing economy is expected to generate employment growth of 2.8 per cent in 2013 and 2.3 per cent in 2014.This will keep the unemployment rate relatively low in Alberta at 4.6 per cent in 2013 and 4.5 per cent in 2014.Alberta’s expanding economy and labour market opportunities will continue to be attractive to migrants.
Net migration to Alberta will remain at an elevated level.While economic growth outside of Alberta is expected to improve, it is not expected to slow the annual flow of migrants to Alberta until 2014, as this province is still expected to lead the country in terms of economic growth. Net migration reached 86,939 in 2012 and is projected at 95,600 in 2013 and 68,100 in 2014.
*The point estimate for provincial total housing starts is 34,200 for 2013 and 34,900 for 2014. Economic uncertainty is reflected by the current range of forecasts which varies from 33,400-35,000 units for 2013 and 31,200-38,600 for 2014.
Housing Market Outlook – Canada Edition – Date Released – Fourth Quarter 2013F
Alberta’s Housing Market
Single Starts: Single-detached starts are projected to reach 18,300 units in 2013 and rise to 19,100 units in 2014. In markets such as Calgary, which are experiencing tighter resale market conditions, expect more buyers to look to the new home market to satisfy their housing needs. In both 2013 and 2014, single-detached starts are expected to rise in most of Alberta’s seven largest urban centres.
Multiple Starts: Multi-family starts are projected to reach 15,900 units in 2013 and remain relatively stable at 15,800 units in 2014. In 2014, Edmonton’s multi-family production will pull back after several years of elevated production due to heightened supply levels. Meanwhile, after declining in 2013, Calgary’s multi-family starts will rise substantially in 2014.The shift in multi-family production between Edmonton and Calgary will help keep the provincial total relatively unchanged in 2014.
Resales: In the resale market, MLS® sales are projected to reach 65,000 in 2013 and then rise to 66,800 in 2014.Alberta’s elevated level of net migration will help support housing demand through 2014. In addition to new household formation, employment and wage growth will also support a higher level of resale transactions.
Prices:The average MLS® price in Alberta is projected to reach $379,200 in 2013 and rise to $387,400 in 2014.The sales-to-new listings ratio for Alberta has been trending higher in 2013, indicative of stronger demand relative to supply. As a result, some locations are exhibiting sellers’ market conditions. New listings are expected to increase in 2014 and will moderate the pace of price growth next year.