The reason is a growing economy that is quickly adding jobs, leading to population growth.
Most other provinces will see a double-digit drop in starts, with only Manitoba seeing a more moderate drop of 5.3% next year.
Alberta will see housing starts in 2012 increase to 27,800 units from the 24,881 this year. In 2010, there were 27,088 housing starts in the province.
Nationally, housing starts will drop 5.4% from 192,000 units this year to 181,600 units in 2012. There were 189,930 starts in 2010.
"With interest rates no longer expected to increase over the next year, home buying intentions have improved modestly,” said the Altus Group in its forecast. “However, deteriorating economic conditions internationally are affecting the outlook for Canada’s economy and leading to lower forecasts of GDP growth in 2012, which will act as a constraint to housing demand.”
Peter Norman, chief economist for Altus Group, said the declines were not overly concerning, however.
“We're talking about basically ratcheting down the level of new housing construction from something like 190,000 units to the mid-180,000s, maybe a bit lower as you go forward,” he said. “That's not in my mind a tremendous fundamental shift, that's not a housing crash, that's not the bottom falling out, there's nothing alarmist about this.”
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The 2011 Housing Forecast, released Tuesday by Altus Group, predicts Alberta’s housing starts will increase by 11.7%, coming on the heels of a 8.1% decline this year compared to 2010.