One of the most important drivers of Alberta’s economy is new home investment according to a report out today by ATB Financial.
Investment over the past couple months has really picked up year-over-year. According to Statistics Canada, developers have recently been spending an average of $708 million per month in the second quarter of 2012, up from $542 million per month in the second quarter of 2011 (ATB’s report inaccurately states the year as Q2 2007 but should be corrected shortly)
ATB notes that there has been a big shift in where the investment dollars have been going in the residential real estate market.
During the boom years of 2006-07 there was a big run-up in the spending on multi-family type buildings (i.e. condos), rising from about $100 million monthly to over $200 million. Subsequent years saw that figure collapse to under $50 million, only recently moving over $100 million.
By far the most important segment for developers is detached single family homes and, while there was a sharp drop off initially during the recession, it came back smartly in 2010 and is currently at near boom time levels of about $500 million monthly
Housing investment has definitely picked back up, but I think it’s a little bit of stretch to say “near boom time levels.” Looking at the actual figures for detached homes, the $500m mark was only eclipsed once so far in 2012 and that was in April.