Newly built, but unsold homes at all-time high in Edmonton

The number of newly built but unsold homes in Edmonton has reached an all-time high, but new-home construction is not likely to slow down soon.

There were 1,328 newly built but empty homes in the city in February, up 66 per cent from the same time last year.

"This is a classic supply-and-demand situation, and in Edmonton right now the supply of new homes that are being put out onto the market, they're outpacing the demand, the number of people out there willing to buy them," said ATB Financial's chief economist Todd Hirsch.  

The backlog may force down new-home prices and slow down the construction industry, but not quickly.

It's likely Edmonton will continue to see the number of unabsorbed housing rise higher, ATB said.

Home builders in Edmonton are driving Alberta's housing sector, accounting for about 60 per cent of all residential building permits issued in the province.

"The glut in the market will affect the industry," said Richard Goatcher with the Canadian Home Builders' Association.

"This is going to squeeze out — I hate to use the word fly-by-nighters — but people who are the marginal operators in the industry aren't very well capitalized and maybe got into the market when things got hot."

Housing starts in Edmonton, down by about 56 percent from this time last year.

Calgary's number of vacant new homes hasn't grown at the same pace as Edmonton's, but is also higher than in previous years.