Fewer new homes will go up in Edmonton this year before the residential construction industry recovers to pre-recession heights next year, said Canada Mortgage and Housing Corp. Monday.
Total housing starts in the Edmonton census metropolitan area for 2011 will not repeat the comeback of 2010, which saw a gain of 56 per cent, the Spring 2011 Edmonton Housing Market Outlook said.
Builders will start 9,250 homes in 2011, down seven per cent from 2010.
But economic growth and more in-migration will lift housing starts by 9.2 per cent in 2012 to 10,100 units, CMHC said.
“Next year’s performance will represent the best year for the homebuilding industry since 2007,” CMHC senior market analyst Richard Goatcher said.
Following 2010’s gain, single-detached starts in 2011 will decrease by nine per cent to 5,500 homes. In 2012, singles will rebound to near 6,000 — but still below the 10-year average of 6,177.
The report said multi-family starts will reach 3,750 units in the Edmonton CMA in 2011. That’s four per cent down from 2010.
In 2010, multi-family starts soared by 61 per cent as new-apartment construction took off. In 2012, the forecast calls for multiple starts to approach 4,100, up nine per cent over the previous year.
In the resale market, the report predicts Multiple Listing Service activity in greater Edmonton will remain mostly flat at 16,500 sales, following a 14-per-cent drop in 2010.
“Despite a slow first quarter, look for demand to improve as the year progresses due to an improving economy and a slightly tighter rental market which will encourage more newcomers to consider home ownership,” Goatcher said.
In 2012, the report forecasts MLS sales to keep rising by more than four per cent to 17,200 units.
The average residential price will rise by only 0.1 per cent in 2011 to $329,000, with most gains in the latter half of the year.
A more balanced market will push the average residential price up by 2.4 per cent year-over-year in 2012 to $337,000.
In the apartment rental market, the vacancy rate will drop by October to 3.8 per cent, down from 4.2 per cent last October. CMHC forecasts vacancy will fall again in 2012 to 3.0 per cent.
Tighter vacancies will mean rising rent, CMHC said. The average two-bedroom rent remained stable at $1,015 in 2010, but will rise $15 in 2011.