Rebuilding continues on Prospect Drive, where nearly all of the homes had been destroyed by fire, in Fort McMurray, Alberta on Thursday, Feb. 16, 2016.Amber Bracken/The Globe and Mail
Fort McMurray is rebounding more quickly than expected from the loss of 2,500 homes in a devastating wildfire last year, with one-third of destroyed houses now under reconstruction in the northern Alberta city.
A new report by Canada Mortgage and Housing Corp. says rebuilding has started on a total of 844 homes that were destroyed by fire in May, 2016, with 722 of the projects launching in the first half of 2017 and the rest launched in 2016.
The study said 99 per cent of the houses destroyed in the fire are slated to be rebuilt, with only a small number of sites to be left vacant to create a flood defence zone.
At the current pace, the rebuilding should be completed by 2020 or 2021, said CMHC analyst Timothy Gensey, who wrote the new report. The city will see its highest level of housing construction starts this year since 2009, when Fort McMurray was booming due to high oil prices.
Fort McMurray fire: One year later, a look at a city working to rebuild from tragedy
"Even in spite of uncertain oil prices, residents of Fort McMurray are returning, they are rebuilding their homes and the community remains vibrant," Mr. Gensey said in an interview.
Mr. Gensey said he had predicted last year that rebuilding would take longer because many at the time felt the city lacked the capacity to launch more than 600 new home construction projects in one year. But the construction push has increased more quickly than estimated, due in part to an influx of construction workers from other areas.
"The community has persevered and there has been a strong push for rebuilding this year," Mr. Gensey said.
The building boom comes as Fort McMurray is facing ongoing weak employment and weakness in the resale home market due to low oil prices, which began to fall in 2014.
Mr. Gensey said it appears most residents have opted to rebuild rather than leave the city or move to other areas. He said there is a risk the city's house supply will outstrip current demand if energy prices remain low, but said reconstruction has been an appealing option for people who want to return to their homes and stay in their neighbourhoods.
The vacancy rate in the city's rental market has fallen from 29 per cent in 2015 to 18 per cent in 2016 as many displaced residents opted to rent while waiting for their houses to be rebuilt. CMHC is forecasting vacancy levels will fall to 10 per cent this year because of demand from construction workers coming to the city to work on house rebuilding projects.
Mr. Gensey said he is not certain whether vacancy rates will remain as relatively low in 2018 or 2019, however, because people will begin moving back into their rebuilt homes, freeing up rental space.