Fort McMurray’s housing market is experiencing strong construction activity in the wake of last year’s wildfires, which destroyed nearly 10 per cent of the city’s structures. A spike in housing starts in the first half of 2017 has supported the ongoing rebuilding efforts with construction started on one third of all destroyed units.
This analysis is the result of a new Housing Market Insight report released today by the Canada Mortgage and Housing Corporation. It updates a July 2016 report on the anticipated response of Fort McMurray’s housing market following the wildfires.
- Since the wildfires, one third of all destroyed residential units have begun reconstruction, representing 844 units. Only one per cent of units destroyed in the fire will not be rebuilt due to flood defense measures. CMHC and the Regional Municipality of Wood Buffalo expect more units to start this year. At the current pace, all the rebuilding activity should take three to four years to complete.
- Vacancy rates in the purpose-built rental market declined as people who were displaced from their homes took up temporary accommodation. Vacancy rates are expected to decline further as workers from outside Fort McMurray come to assist with the rebuild. However, vacancy rates will likely remain elevated compared to pre-2014 levels despite workers taking up residence in the rental market.
- After a stronger third and fourth quarter of 2016, the resale market showed weakness once again. Resale market activity will likely remain low until energy markets stabilize.
Although Fort McMurray’s economy has shown improvement as a result of the rebuild effort, the longer term outlook remains uncertain. Unemployment is down, but still above levels seen prior to the steep drop in oil prices. The influence of weak oil prices is particularly evident in the resale market.
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As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.