New home starts finished 2015 down 23.9 per cent from the record previous year, according to Canada Mortgage and Housing Corp.
The agency said total starts in the Calgary area reached 13,033 units in 2015 — 4,138 single-detached homes (down 36.3 per cent from 2014), and 8,895 multi-family homes (down 16.4 per cent).
In December, there were 756 total starts, off 10 per cent from December 2014. For the month, single-detached starts fell 26.9 per cent compared with a year ago, to 312, but multi-family were up 7.5 per cent to 444.
CMHC said starts were trending at 12,716 units in December compared to 14,388 in November. The trend is a six-month moving average of the monthly seasonally-adjusted annual rates.
“New home demand in 2015 has moderated as employment, migration and consumer confidence have been impacted by low oil prices,” said Richard Cho, the CMHC’s principal of market analysis in Calgary.
According to CMHC data, 2015 had the highest number of total annual starts — outside of last year — in the Calgary CMA since 2007. During the last recession, total starts dipped to 6,318 in 2009.
In Alberta, the annualized rate for starts fell from 35,100 a year ago to 26,000 in December.
“It was the first month in 2015 to give convincing evidence that the housing sector is finally bending to the slowing economy and weaker consumer demand,” said ATB Financial chief economist Todd Hirsch.
He said additional easing of new home construction is likely in 2016.
“Not only have oil prices continued to drop in the new year, but the level of interprovincial in-migration has also slowed. As well, new homes compete with existing homes for sale on the market — and in both Edmonton and Calgary, the number of listings of unsold homes has grown significantly. That will give home buyers plenty of selection and better prices to compete with new home sales.”
Robert Kavcic, senior economist with BMO Capital Markets, said starts in Alberta plunged 39 per cent in the month, the biggest drop since 2008 and pulling activity down to a four-year low.
“We’ve often noted that starts tend to lag sales by six-to-eight months, and the precipitous drop in Alberta building activity now appears to be reflecting much weaker demand conditions in the province,” he said.
Nationally, starts fell to 173,000 annualized units in December from 212,000 in the prior month.