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Market Watch May 2019 – Full Report

Summary

Following a weak first quarter, employment levels in Greater Edmonton improved month-over-month in April and the jobless rate inched lower. Year-over-year, the number of people working across the region was up on average by over 4% from April 2018.

Construction intentions continue to lag 2018 levels across the region. After 3 months, the total value of building permits issued was down by 38%. The fallback has been slightly greater in the non-residential sector.

After a slowdown in February and March, total housing starts improved year-over-year in April thanks to an uptick in new apartments. However, total inventories of unabsorbed new units remain well above the levels recorded by CMHC in April of last year.

Sales reported by the Realtors Association of Edmonton showed a modest rebound in April following a disappointing first quarter. While down slightly from this time last year, MLS inventories remain high by historic standards giving buyers the upper hand. As such, sale prices remain under downward pressure.

Economy

Employment (Edmonton CMA)

• Employment (seasonally adjusted) in the Edmonton region edged upward month-over-month in April by 400 jobs.

• Compared with a year prior, the number of people working in April was up by 4.4%.

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Unemployment Rate (Edmonton CMA)

• The jobless rate (seasonally adjusted) in the Edmonton CMA declined in April to 6.9% from 7.1% in March.

• The unemployment rate in April of last year was 6.6%.

Avg. Weekly Earnings (Edmonton CMA)

• Statistics Canada’s average weekly earnings (AWE) in the Edmonton CMA remained unchanged month-over-month in March at $1,181.

• AWE levels in the first quarter were up on average by 2.6% from January to March 2018.

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Alberta Net Migration

• Total net migration into Alberta from all sources increased during the fourth quarter of 2018 by 90% from the last 3 months of 2017 to 9,196 newcomers.

• Alberta saw the highest fourth quarter total net migration numbers since 2013 due to stronger immigration and a continued improvement in inter-provincial net migration.

Development

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Building Permit Values (Edmonton CMA)

• The value of building permits (total - unadjusted) in the Edmonton CMA dropped in March by 43% year-over-year to $263.7 million.

• Residential intentions declined 43% from a year earlier to $170.4 million while non- residential permit values fell by a similar margin to $93.3 million.

Low-density Residential Lot Inventory (Edmonton Region)

• Edmonton Housing Research Corp’s (EHRC) first quarter 2019 survey found that the low-density (single & semi-detached) residential building lot supply in the Edmonton area was up in March by 7.6% year-over-year to 11,911 sites.

• The inventory of single-detached lots in the Edmonton CMA amounted to 9,587 sites in March, up 8% from a year earlier.

• Vacant semi-detached sites (completed & unabsorbed) stood at 2,324, up 5.8% from March 2018.

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New Housing Market

Housing Starts – Low-density [single- & semi-detached] (Edmonton CMA)

• Single-detached starts in the Edmonton area decreased in April by 28.7% from year-ago levels to 323 units.

• Semi-detached starts fell in April by 55% year-over-year to 82 units. • So far this year, single and semi-detached starts combined were down by 37.4% from

January to April 2018 to 1,275 units.

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Housing Starts – Medium & High-density [row & apartment] (Edmonton CMA)

• Townhouse (row) and apartment starts in the Edmonton region increased in April by 151% to 464 units. Compared with April 2018, apartment starts jumped more than three-fold to 385 units.

• For the year-to-date, row and apartment starts have increased 53% from the first 4 months of 2018 to 1,508 units.

Unabsorbed New Home Inventory (Edmonton CMA)

• CMHC reported 1,912 completed and unoccupied single and semi-detached units (including show homes) in Metro Edmonton in April, up from 1,893 units in March and 1,327 units a year earlier.

• Unabsorbed new townhomes and apartments in the Edmonton region amounted to 1,144 units in April, down from 1,161 in the previous month but up from 914 units in April of last year.

• Total new home inventory in April was up 34.4% from year-ago levels to 3,056 units.

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New House Avg. Prices (Edmonton CMA)

• The average price for single-family homes absorbed in the Edmonton CMA (CMHC data) decreased in April by 4.3% year-over-year to $544,855.

• After 4 months in 2018, the average absorbed single-detached price has declined by 4.2% from the same time last year to $548,442.

Existing Home Market

Residential Sales (Edmonton CMA)

• Residential MLS sales in the Edmonton area (CMA) increased in April by 1.6% from a year prior to 1,684 units. This was the first year-over-year gain since August.

• So far this year, home sales by realtors have decreased by 8.4% from January to April 2018 to 4,656 units.

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Residential Active Listings (Edmonton CMA)

• The residential (MLS) active listings at the end of April amounted to 9,015 units, up from a revised 8,289 active listings at the end of March.

• MLS inventory at the end of April 2018 stood at 9,178 units.

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Residential Average Price (Edmonton CMA)

• According to the Realtors Association of Edmonton, the average sale price for homes sold on the MLS (Edmonton CMA) decreased in April by 1.9% year-over-year to $365,129.

• For the year-to-date, the average MLS residential sale price has declined 4.3% from the first 4 months of 2018 to $356,357.

Costing Trends

Asphalt Cement (Edmonton Rack Price Index – $C/t)

• The rack price for asphalt cement in Edmonton remained at $755 per tonne in April. • The asphalt rack price index stood at $655/t in April of last year.

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Diesel Fuel (Retail price $/litre)

• Pump prices for diesel in the Edmonton CMA averaged $1.240 in April, up from $1.224 in March.

• According to NRCan, diesel fuel retailed in the Edmonton region on average for $1.205 in April of last year.

Construction Union Wage Rates

• Construction union wage rates in the Edmonton region were up year-over-year in April by 0.6%.

• Month-over-month, the wage rate index has been unchanged since November.

EDMONTON REGION (CMA)ECONOMY

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AnnualEMPLOYMENT (X,000 SA)

2017 748.4 753.1 759.4 763.9 766.4 763.2 759.6 760.6 763.9 768.3 769.3 770.5 762.22018 767.2 763.8 762.7 764.2 769 775.1 782.8 789.6 792.3 795.8 799 801.2 780.22019 801.0 798.5 797.1 797.5 798.5

UNEMPLOYMENT RATE (% SA)2017 8.2 8.4 8.5 8.2 8.0 8.1 8.4 8.6 8.2 7.8 7.4 7.2 8.12018 7.1 6.8 6.7 6.6 6.5 6.6 6.5 6.4 6.3 6.3 6.2 6.3 6.52019 6.4 7.0 7.1 6.9 6.9

AVG. WEEKLY EARNINGS ($)2017 1,121 1,103 1,090 1,085 1,089 1,098 1,115 1,143 1,161 1,168 1,166 1,163 1,1252018 1,159 1,156 1,149 1,145 1,145 1,143 1,152 1,154 1,167 1,175 1,189 1,193 1,1612019 1,191 1,181 1,181 1,184

TOTAL NET MIGRATION (ALBERTA - QUARTERLY)2016 7,072 6,569 5,055 2,587 21,2832017 3,960 5,163 9,837 4,838 23,798

ANNUAL POPULATION GROWTH & NET MIGRATION (EDMONTON CMA)2012 2013 2014 2015 2016 2017 2018

Population estimates, July 1 1,234,370 1,271,897 1,312,494 1,338,517 1,364,285 1,391,154 1,420,916Net increase 28,999 37,527 40,597 26,023 25,768 26,869 29,762Per cent change 2.4% 3.0% 3.2% 2.0% 1.9% 2.0% 2.1%Total Net Migration 20,320 28,447 30,858 16,051 15,135 16,234 19,312Per cent change 40.0% 8.5% -48.0% -5.7% 7.3% 19.0%Source: Statistics Canada

EDMONTON REGION (CMA)DEVELOPMENTBUILDING PERMIT VALUES (X$000)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AnnualRESIDENTIAL

2017 190,338 170,558 312,058 308,269 277,085 273,131 280,458 370,442 366,827 309,973 224,271 216,181 3,299,5912018 245,034 205,899 299,131 338,848 302,469 255,409 245,199 199,952 192,651 200,053 213,035 168,949 2,866,6292019 121,238 190,615 170,399 482,252

NON-RESIDENTIAL2017 208,836 100,604 146,675 119,839 103,899 184,962 136,779 140,480 96,430 292,867 217,381 113,603 1,862,355 2018 144,883 142,298 164,135 99,839 124,153 361,881 145,195 178,211 123,664 274,320 186,994 114,348 2,059,9212019 85,243 81,340 93,299 259,882

Source: Statistics Canada

LOW-DENSITY LOT INVENTORY (QLY) (COMPLETED & UNABSORBED)SINGLE-DETACHED Avg.

2017 8,991 7,930 7,515 9,164 8,4002018 8,870 7,845 8,036 9,093 8,4612019 9,587 9,587

SEMI-DETACHED2017 2,463 2,264 2,094 2,294 2,2792018 2,196 1,820 1,870 2,172 2,0152019 2,324 2,324

Source: EHRC (Dave LaRose)http://www.edmhrc.ca/

EDMONTON REGION (CMA)NEW HOME MARKET

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AnnualSINGLE-DETACHED STARTS

2017 244 348 280 357 487 570 498 566 453 413 400 412 5,0282018 298 346 368 453 511 475 563 415 371 306 376 332 4,8142019 211 221 260 323 1,015

SEMI-DETACHED STARTS2017 138 176 124 160 146 182 178 184 174 188 148 112 1,9102018 136 154 98 184 172 162 128 130 116 106 128 82 1,5962019 50 46 82 82 260

ROW + APARTMENT STARTS2017 66 582 756 377 657 79 538 205 457 209 378 193 4,4972018 285 333 182 185 280 225 390 841 111 76 496 230 3,6342019 529 337 178 464 1,508

SINGLE+SEMI-DETACHED INVENTORY2017 992 997 991 985 1,016 1,060 1,110 1,043 1,001 1,011 1,086 1,105 1,0332018 1,189 1,221 1,251 1,327 1,328 1,335 1,341 1,418 1,395 1,565 1,651 1,805 1,4022019 1,941 1,900 1,893 1,912 1,912

ROW + APARTMENT INVENTORY2017 974 1,132 1,120 1,133 1,117 1,180 1,230 1,208 944 956 940 1,008 1,0792018 942 1,052 993 914 909 915 939 907 838 797 790 794 8992019 1,051 1,116 1,161 1,144 1,118

SINGLE-DETACHED ABSORBED AVG. PRICE ($)2017 541,306 580,840 544,892 539,434 550,516 562,837 562,254 599,740 566,872 556,208 540,998 573,678 560,6292018 587,820 576,222 550,174 569,244 545,047 557,261 532,913 545,675 574,340 635,541 586,473 559,088 567,6162019 567,987 542,257 533,711 544,855 548,442

Source: CMHC

EDMONTON REGION (CMA)EXISTING HOME MARKET

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AnnualRESIDENTIAL SALES

2017 780 1,185 1,558 1,578 1,843 1,861 1,619 1,538 1,335 1,337 1,165 906 16,4352018 940 1,108 1,380 1,657 1,776 1,678 1,603 1,567 1,225 1,155 1,042 728 15,5192019 799 986 1,200 1,684 4,656

RESIDENTIAL ACTIVE LISTINGS2017 5,759 6,255 6,938 7,652 8,212 8,874 8,963 8,969 8,355 7,708 7,046 5,769 7,5422018 6,488 7,115 8,344 9,178 9,859 10,042 9,877 9,108 8,593 7,899 7,080 6,684 8,3562019 7,076 7,418 8,289 9,015 7,950

RES. AVG. PRICE ($)2017 356,850 364,283 373,204 381,129 379,175 394,468 383,997 373,534 370,462 370,364 370,570 357,005 374,4002018 361,323 375,117 377,145 372,329 377,139 377,880 370,046 364,925 373,958 358,954 360,763 360,685 369,6072019 338,760 354,598 357,316 365,129 356,357

Source: RAE (MLS)

EDMONTON REGION (CMA)COSTING TRENDS

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AnnualASPHALT CEMENT - RACK (C$/T)

2017 650 650 650 650 650 650 650 650 650 650 650 650 650.02018 565 565 605 655 730 730 730 730 755 755 755 755 694.22019 755 755 755 755 755.0

Industry SourcesAVERAGE RETAIL PRICE - DIESEL FUEL ($/litre)

2017 1.031 1.033 1.037 1.043 1.037 1.009 0.987 0.997 1.016 1.076 1.166 1.165 1.0502018 1.216 1.225 1.212 1.205 1.248 1.273 1.251 1.249 1.244 1.286 1.285 1.205 1.2422019 1.129 1.166 1.224 1.240 1.190

Source: NRCanCONSTRUCTION UNION WAGE RATES (Composite Index - yr/yr % Chng.)

2017 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%2018 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% 0.6% 0.1%2019 0.6% 0.6% 0.6% 0.6% 0.6%

Source: Statistics Canada