A Medicine Hat developer says a federal housing report predicting minimal growth this year in the southeastern Alberta community’s construction sector is too rosy.
“I think 2016 will be one of the most difficult years ever in Alberta,” said Don Sandford, vice president of Lansdowne Equity Ventures.
The Canadian Mortgage and Housing Corporation’s (CMHC) fourth quarter new housing update, released in early December, states low oil prices will hamper residential building in Alberta and Saskatchewan until economic conditions improve in 2017. Resale conditions will also favour the buyer but prices should gradually increase in step with the oil price, the Medicine Hat News reports.
Locally, detached home construction is forecast to end the year with 170 starts in Medicine Hat and nearby communities, representing a 13.3 per cent decline from 2014. However, CMHC says that figure should increase to 175 homes in 2016, then 180 in 2017 – about a three per cent rise each year.
Sandford said the prediction is much too optimistic considering lot sales in 2015, as well as the fact there are about 55 recently built homes as yet unsold in the area right now.
“Typically there would be about 30 in a normally functioning economy,” said Sandford. “There are indications that the economic conditions are getting worse.”