Edmonton housing prices could see a substantial drop soon as the number of vacant homes in the city soars.
In February, 1,328 newly built homes were unoccupied, according to Statistics Canada.
Numbers are troubling
ATB Financial economist Nick Ford says the high number of unabsorbed homes, or homes that are built but don't have a buyer, is troubling.
"Firstly, having a rising number of unabsorbed houses can have a negative effect on prices," wrote Ford, in a blog post for ATB's blog The Owl.
"And, at a time when construction is already slowing, excess supply of housing stock is likely to slow the construction industry even further."
Prices have been stable
Up until now, house prices in Edmonton have stayed relatively stable.
“Edmonton has yet to see any substantial price drop in residential housing. Calgary is seeing it already, but [in] Edmonton, I think, that will come,” Todd Hirsch, chief economist with ATB Financial, told Metro News.
In the first three months of 2016, there were 2,111 housing starts in Edmonton, down 62 per cent from the same period in 2015, according to a report by the Canada Mortgage And Housing Corporation.
"The glut in the market will affect the industry," said Richard Goatcher of the Canadian Home Builders' Association, in an interview with CBC News.
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