Developers watch sales volumes, price trends, and — crucially — financing costs. When rates drop and demand heats up, they pull permits and break ground. When rates spike, projects get shelved.
A developer deciding to build a 200-unit apartment building is making a bet that will not pay off for 2-3 years. They borrow millions at today's rates, build for 18+ months, and then sell or lease into whatever market exists when they finish. So they are incredibly sensitive to interest rates — not just today's rates, but where they think rates are headed.
Housing starts — the number of new units where construction has actually begun — are the clearest signal of what supply will look like in 1-2 years. Watch how Edmonton and Calgary track each other but are not identical: Calgary's boom-bust cycles are sharper because of its heavier tilt toward the energy sector.
Edmonton Starts (latest)
Calgary Starts (latest)
Once ground is broken, it takes 1-2 years before units are ready to occupy. The gap between starts and completions today tells you what supply will look like in 12-18 months.
This is the part that most people miss. When starts spike today, those units will not hit the market for over a year. If completions are low right now, that means we are living with decisions developers made 18 months ago — before the most recent rate cuts.
The chart below shows Edmonton's construction pipeline. When the orange completions line is well below the blue starts line, that means a wave of new supply is coming. When they converge, the pipeline is draining and future supply is thinning out.