Calgary Job Growth to improve in 2011!

Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., says improving employment and net migration data will support modest growth in new home construction in 2011.
CALGARY – Job growth is expected to gradually strengthen into 2011 as economic activity improves, says a report by Canada Mortgage and Housing Corp.
In its Housing Market Outlook, the CMHC said changes to the provincial royalty framework and sustained energy prices are expected to attract more investment and support employment growth.
In 2011, employment is forecast to rise 1.8 per cent in the Calgary region.
“Calgary’s unemployment rate peaked at 7.6 per cent in May 2010, reaching its highest level since 1996,” said the housing market outlook.
“With the economy steadily improving and employment rising, the unemployment rate is forecast to average seven per cent in 2010 and decline to 6.4 per cent in 2011.”
Net migration for the Calgary census metropolitan area is forecast to rise from 14,000 in 2010 to 15,000 in 2011.
In its report, the CMHC predicts MLS sales in the Calgary CMA to increase by 2.0 per cent next year to 20,700 units while the average sale price will rise by 0.5 per cent to $401,000.
When the market peaked in 2007, there were 32,176 MLS sales for an average price of $414,066.
The agency is forecasting single-detached starts to rise by 3.4 per cent in 2011 to 6,100 units while multi-family starts will fall by 2.2 per cent to 8,900.
In 2007, there were 7,777 single-detached starts in the Calgary region and 5,728 multi starts.
“In 2011, new construction will increase at a modest rate as the economy gradually improves, supporting growth in employment and net migration,” said Richard Cho, senior market analyst in Calgary for the CMHC.
“Housing market conditions will improve in 2011, but the gains may be a bit subdued in the early months of the year as the market transitions from buyers to balanced levels and competition from the resale market continues to moderate. The pace of sales in will be more reflective of the trends in the primary drivers of housing demand such as employment and wage growth as well as net migration. These factors are expected to continue improving as economic activity expands.”
Calgary’s rental apartment vacancy rate is forecast to decline from 5.3 per cent in October 2009 to 4.9 per cent this year. With improving economic conditions next year, the vacancy rate is expected to fall to four per cent in 2011, said the CMHC.
The average rent in Calgary is expected to decline as vacancy rates remain elevated. In October, the average two-bedroom room was estimated at $1,090 per month, nine dollars lower than the previous year. The CMHC said fewer incentives will be offered in the market as demand continues to improve. With vacancies declining in 2011, and fewer incentives being offered, the average two-bedroom rent will rise to $1,100 per month by October 2011, it said.
The CMHC is presenting its forecast today in Calgary at the Housing Outlook Conference.
A Provincial Outlook report by the Conference Board of Canada, released today, says Alberta’s economy will enter another period of prolonged growth starting in 2011. The province is expected to create nearly 60,000 new jobs next year, which-when combined with steady growth in wages and salaries-will keep consumer spending solid.
“The tighter labour market also means that Alberta will re-emerge as a destination of choice for Canadians searching for jobs, allowing net interprovincial migration to regain some of the momentum it lost over the recession,” said the conference board.
Boosted by a swift rebound in the drilling industry, real GDP in Alberta is expected to advance by 3.6 per cent in 2010, it predicted, adding that economic growth in the province would be 2.8 per cent in 2011.
The conference board said labour markets will continue to tighten as the economy is expected to generate 66,000 new jobs in 2012.
“The combination of strength in the service sector and strong growth in goods production – led by the energy sector – will push real GDP up 4.1 per cent in 2012.”
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