Sun
New Calgary homes: ‘The only way we achieved such [record] gains was due to the cost escalation in the construction market,’ one analyst says. Photograph by : Mikael Kjellstrom, Canwest News Service, Files
CALGARY — Despite a moderating real estate market, investment in housing in Alberta continued to soar in 2007, with the province adding the largest dollar volume of any.
Housing construction pushed spending up 19 per cent to a record $14.7 billion.
Analysts say high construction and renovation inflation drove over-all residential construction expenditures higher and renovation growth to a record, up 13 per cent from a year ago.
the pattern of surging housing expenditures in Alberta all of 2007 was also evident in the last three months of the year, when residential construction investment surged nearly 20 per cent to $4.1 billion.
“With weaker housing starts, the only way we achieved such gains was due to the cost escalation in the construction market,” said Richard Corriveau, regional economist for Alberta for Canada Mortgage and Housing Corp.
Corriveau cited Alberta’s new housing price index, which was 41 per cent higher than a year earlier in January 2007, 12.5 per cent higher in December 2007 and averaged 23.7 per cent for the year as another indicator of rampant price inflation in the housing area.
The agency measures residential housing investment using three broad categories; new housing, renovations and acquisition costs and all three posted gains in 2007, with new housing leading the way.
© The Vancouver Sun 2008
