Big week ahead for Alberta's housing industry
This week we'll get a veritable potpourri of housing information for Alberta.
On Tuesday, the Canada Mortgage and Housing Corporation (CMHC) will be releasing the number of housing starts in the province for the month of July.
On Thursday, Statistics Canada will release the new housing price index for June and on Friday we get both the existing sales numbers for July, as well as the MLS home price index for the same month.
Lots of data
It's a lot of data, but is there one piece that has more weight?
Housing starts are typically considered to be leading economic indicators, as they are forward looking, while numbers like the MLS existing house prices are considered to be a lagging one.
Scott Smith, the senior market analyst at Cambridge Payments in Calgary, believes that when it comes to Canadian housing data, you need to factor in all of the information together to get an overall reading of the housing market.
Smith is expecting to see the trend we've been seeing over the course of 2014 and early 2015 continue where there is a dichotomy in terms of the market in general.
He thinks house prices will remain elevated in Toronto and Vancouver but we'll continue to see slippage in Alberta.
Downward trend
"You'll see pockets of strength in certain markets, but again we're likely to see housing prices in Alberta continue to trend downward with the downturn in energy prices," he said.
Smith thinks we're likely to see that softness permeate through to housing starts and permits at the same time in Alberta.
Hilliard MacBeth, a portfolio manager in Edmonton and author of the book the Bubble Bursts: Surviving the Canadian Real Estate Crash, says he'll be watching the housing start numbers, since Alberta's have been some of the highest in all of Canada.
"Edmonton actually even more than Calgary, year over year up until recently, showed gains of 49 per cent, which is pretty amazing when you think that we're going into this difficult economic environment with the lower oil price."
But the number Hilliard is waiting for, along with everyone else, is the GDP numbers we get on Sept. 1. That's when we'll get the answer to the most asked question of the summer — are we in a recession or not.
"Alberta's probably got the most difficult path to go through, because we had the biggest expansion and the biggest investment, we saw a very rapid expansion of our housing industry and the construction industry. So we have the most to lose in terms of a slowdown."
