Housing markets in Western Canada were particularly robust during most of the past decade, as an inflow of new residents, rising income levels associated with the strength of energy prices, and a tight supply of housing combined to put upward pressure on house prices. In Alberta, this led to a strong supply response, with house-building activity rising sharply.
But with the recession and tumbling commodity prices, a housing market correction was inevitable. For Canada as a whole, prices for resale housing dropped by about 9 per cent 2 and for new homes, by about 3.5 per cent 3 compared with their 2008 peaks. The correction was much steeper, though, for regions that had previously experienced the largest increases.