It's been three months since I have posted on the new construction situation in Edmonton. Since then single family home construction has increased and starts have remained high.
Single family home under construction peaked at 6,528 in August 2007 before falling to 1,764 April 2009 and finally rebounding to 3,760. It looks like the weakness in resale market has not yet had an impact on new homes. I expect to see price declines on existing resale inventory to lead a shift away from new homes as they become less competitive.
Total construction has been slower than single family alone. This is because condos took longer to recover with units under construction bottoming at 2,142 this March and have rebounded to 2,759 in May. While there is less oversupply going into this downturn compared to 2007 (10,314 vs. 17,781 in the chart above), weaker interprovincial migration and declining resale market will have a negative impact on new construction going forward.