While the Edmonton region is experiencing the slowest performance for single-detached builders since the 2009 recession, St. Albert’s multi-family market is booming.
In the first six months of 2016, total starts have risen by 352 per cent in St. Albert, due to an influx of multi-family activity.
Last year there were only 16 apartment and condo starts in St. Albert. So far this year, there are 398 rental and condo units being built in the community.
Last year was a record year for multiple dwelling starts in the capital region and builders have reduced activity to help inventories balance out. Multi-family homes starts have decreased by 51.6 per cent in the Edmonton region to 3,058 units.
But with a gap in the St. Albert market, builders can afford to build here without fear of staying vacant, said principal Canadian Mortgage and Housing Corporation market analyst for Edmonton, Christina Butchart.
“One of the reasons we’re seeing more activity in St. Albert than in the rest of Edmonton overall is traced back to inventory,” she said. “Inventory in St. Albert has moved up a bit, but on the multifamily side it hasn’t moved up as much as Edmonton.”
Single-family starts in the botanical arts city, however have slowed, much like in the rest of the region. There was a decrease of 28.2 per cent, with only 56 single-family dwelling starts built between January and June 2016.
In the first six months of 2016, single-family starts in the Edmonton CMA decreased by 37.7 per cent. Only 1,879 single-family homes have been built since January. By this time last year there were 3,020.
There are two factors at play here said Butchart: the first being the softer economic conditions brought on by lower oil prices, the second, inventory. The number of newly completed homes available on the market has been trending up and resale stock is also elevated.
“When you have both those pools of homes, builders are pulling back on their starts because there is that elevated supply in the marketplace,” said Butchart.
Sales are also slowing, meaning homes are staying on the market longer. Homes are spending an average of 54 days on the market – pushing up the active number of listings and ballooning the inventory.
High absorption and lower completion rates for single-family homes in June 2016 (92 per cent and 13 units), compared to the same time last year (68 per cent and 19 units), indicate that builders have stopped building on spec.
Edmonton real estate sales slowed in June. Flat month-over-month, year-to-date sales were down 11.1 per cent according to the latest Realtors Association of Edmonton report.
Prices, however, have not changed much from this time last year – up only 0.1 per cent over June 2015. Units were more likely to sell if under $500,000 price mark said the association.
In St. Albert, single-family homes sales were up slightly by 3.9 per cent in June 2016 to 106 units, but year-to-date sales dropped 1.5 per cent to 444.
Condo sales are up 42.1 per cent over June 2015 and 6.4 per cent over the first six months of last year.
Prices increased modestly year-over-year, up 3.3 per cent to $487,836 for a single-family home and 4.9 per cent to $274,587 for a condo.
