Alberta Renovation Activity
Richard Goatcher, Economic Analyst, CHBA - Alberta
March 2, 2017
Despite a slowdown in the Alberta economy, spending on residential renovations held up well in the past year. According to Statistics Canada’s residential investment data, renovation spending during the fourth quarter of 2016 increased year-over-year by 3.5% to $1.6 billion.
On an annual basis, renovation activity in Alberta declined in 2016 by 8% from the previous year to $5.8 billion. Spending in 2016 was down from the peak years of 2013 to 2015, which averaged near $6.4 billion per year. Volumes during these years were lifted in part by the flooding that occurred in southern Alberta during the summer of 2013. Activity in 2016 was nonetheless well above the 10-year average for the period 2006 to 2015 which typically amounted to $4.9 billion per year.
In the coming year, look for the renovation spending to remain relatively strong by historic standards. The reconstruction efforts in Ft. McMurray will bolster both new housing numbers and renovations. According to CMHC, construction has to be on a new foundation to be counted as a housing start. If a dwelling is built on an existing foundation, it is considered a renovation regardless of the extent of new construction. New provincial carbon taxes will also encourage homeowners and property managers to make upgrades that will improve the energy efficiency of their units.
With the Alberta economy expected to improve this year, homeowners will be looking to make home improvements while the costs of labour and materials are low. Others will choose to upgrade their home’s curb appeal in preparation to move up and also tap into pent-up demand that accumulated during the recent economic slowdown. A growing economy is expected to boost housing sales going into 2018.