Session A2: 10:20am WELCOME TO EDMONTON: THE IMPACT OF POPULATION GROWTH ON THE HOUSING MARKET Moderator: Brad Gingerich, Senior Vice President, CBRE Limited Panel: Bill Blais, Vice President Land Development, Maclab Enterprises Chris?na Butchart, Senior Market Analyst, CMHC Rohit Gupta, President, Rohit Communi?es Michael Smith, Senior Vice President, Mul? Family, WAM Development Group
2014 Edmonton Real Estate Forum May 8, 2014 Edmonton Economic and Housing Market Outlook Christina Butchart, Senior Market Analyst
Economic & Housing Outlook - Agenda Economic Outlook New Single-family Market New Multi-family Market Rental Market
net migration 40,000 Edmonton CMA Net Migration Net migration boosts housing demand 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: Statistics Canada, July to June, CMHC Forecast (f)
Edmonton CMA Population Growth Net migration fuelling higher population growth year-over-year per cent growth 4.0 3.0 2.0 1.0 0.0 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Statistics Canada
7% 6% 5% 4% 3% 2% 1% 0% Edmonton CMA Employment Growth employment growth year-over-year Employment to increase in 2014 and 2015-1% -2% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: Statistics Canada, CMHC Forecast (f)
Edmonton s New Single-Detached Market
units 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 Edmonton CMA Single-detached Starts New construction trending upward in Edmonton SAAR Trend 2,000 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC, SAAR (Seasonally Adjusted Annualized Rate)
Edmonton CMA Single-detached Supply Supply gradually trending higher complete and unabsorbed plus units under construction 8,000 7,000 Inventory Under Construction 6,000 5,000 4,000 3,000 2,000 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC
units Edmonton CMA Single-detached Starts Continued growth in single-detached construction in 2014 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: CMHC, CMHC Forecast (f)
Edmonton CMA Single-detached Price absorbed price (6-month moving average) $600,000 Absorbed prices starting to move higher $500,000 $400,000 $300,000 $200,000 Average Median $100,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC
Edmonton s New Multi-family Market
Edmonton CMA Multi-family Market Share Multi-family starts accounting for a larger share of the market Multi-family starts as a percentage of total starts 90% 80% 70% 60% 50% 40% 30% 20% Semi Row Apartment 10% 0% 1973 1978 1983 1988 1993 1998 2003 2008 2013 Source: CMHC
units 18,000 16,000 Edmonton CMA Multi-family Starts Multi-family construction trending lower SAAR Trend 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC, SAAR (Seasonally Adjusted Annualized Rate)
units 800 700 Edmonton CMA Multi-family Inventory Lower apartment inventories spurred construction in 2013 Semi Row Apt 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC
Edmonton Multi-family Under Construction Increase in units underway to put upward pressure on inventories units 12,000 Semi-detached Row Apartment 10,000 8,000 6,000 4,000 2,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CMHC
units 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 Edmonton CMA Multi-family Starts After strong performance in 2013, expected to moderate in 2014 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: CMHC, CMHC Forecast (f)
Edmonton s Rental Market
per cent 5 Edmonton CMA Apartment Vacancy Rate Vacancy rate continued to decline in 2013 4 3 2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: CMHC, October Surveys, CMHC Forecast (f)
Edmonton CMA Rental Apartment Starts Low vacancy rate has led to rental apartment construction units 2,000 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: CMHC
Edmonton CMA Average Apartment Rent Rents will continue to rise average two-bedroom rent $1,200 $1,000 $800 $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Source: CMHC, October Surveys, CMHC Forecast (f)
Edmonton CMA Forecast Summary Economy 2012 2013 2014f 2015f Employment Growth (%) 3.3 3.6 2.2 2.0 Net Migration 24,928 38,511 20,000 18,000 Resale Market* Total Sales 17,641 19,552 19,800 20,100 Average Price $334,319 $344,977 $353,000 $360,000 New Home Market Single-detached Starts 5,658 5,970 6,200 6,300 Multi-family Starts 7,179 8,719 7,000 6,400 Rental Market (October Survey) Apartment Vacancy Rate 1.7% Housing market 1.4% intelligence 1.6% you can count 1.7% on Average Two-bedroom Rent $1,071 $1,141 $1,175 $1,200 * Total Residential Source: CMHC, Statistics Canada, CREA, CMHC Forecast (f) The forecasts included in this table reflect information available as of January 22, 2014
Contact Information Christina Butchart Senior Market Analyst, CMHC cbutchar@cmhc.ca (780) 423-8729
Thank You!
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