Markus Emirsch, September 4, 2009, Sun Media
Residential construction will continue at a slow pace in Calgary next year, says data released yesterday by the Canada Mortgage and Housing Corporation.
By the end of this year, builders in the Calgary area will have poured 4,800 foundations, down dramatically from the 11,438 foundations poured last year, the federal agency says.
Construction will pick up ever so slightly next year, but a rebound to the numbers of yesteryear is nowhere in sight as only 5,400 foundations are forecast to be poured in Calgary in 2010.
For Alberta, housing starts for this year are forecast to total 16,100, down from 29,164 last year. Housing starts for 2010 are forecast at 18,250.
The resale market, however, is a different story.
Total MLS sales in Calgary are predicted to hit 22,800 this year and 23,500 in 2010, which is slightly above the 23,136 homes sold in 2008.
"Right now, primarily the blip in the market has 100 percent to do with cheap money," said Russell Westcott, vice-president of sales and marketing for the Real Estate Investment Network.
Mortgage rates are at historic lows as the Bank of Canada is keeping interest rates depressed to help spur Canada's still sputtering economy.
Westcott said although the CMHC is generally an "extremely good resource" with its forecast data, its prediction for the resale market in Alberta may be too rosy.
"Unfortunately, I think that next year, you're going to see a lot of flatness," he said.
Nonetheless, he said Canada's economy is still the envy of other developed economies.
Unlike many observers, however, Westcott is steering clear of heralding an imminent recovery, especially in the housing market.
"Some of the indicators are a bit too rosy," he said.
"They keep talking about all these green shoots. You have to make sure green shoots aren't weeds, first of all. I think we're still going to see a lot of turbulence for at least another year or maybe 18 months."
And that, he said, continues to be good news for those wishing to buy a home, as prices will remain low.
CMHC forecasts Calgary's average MLS price to reach $395,000 in 2010, up from $383,000 this year.