Apartments drive growth in multi-family starts

New construction of multi-family development for the Calgary area in March eclipsed activity from the same month a year earlier by 668 starts.

Shovels were in the ground for 862 multi-family units of all kinds in the Calgary census metropolitan area last month, says Canada Mortgage and Housing Corp. A year ago, there were 194.

Multi-family activity in March also marked a month over month climb from 212 in February 2017.

The Calgary census metropolitan area also counts activity in nearby cities and towns, including Airdrie, Cochrane and Chestermere.

Within Calgary city limits alone, the year over year increase in March jumped to 840 from 153.

Last month’s growth was largely driven by apartments, with 662 units taking root in the Calgary area. This includes 422 in the condo ownership sector and 240 for purpose-built rental.

“We can see large swings in apartment starts on a month-to-month basis,” says Richard Cho, CMHC’s principal of market analysis.

In February 2017, there were 18 construction starts, and 80 in March 2016.

Leading the Calgary area in new construction of apartments last month was the city’s downtown and Beltline districts, credited for 338 and 207 starts, respectively.

The other two multi- family home styles recorded growth last month, as well.

Shovels turned for 130 townhomes last month, compared to 68 a year ago. In fact, starts for this segment in March was the highest of any month since September 2016.

The Fish Creek area paced all ends of Calgary in townhomes that broke ground last month with 44, followed by 37 in the city’s northwest quadrant.

There were 70 duplex starts compared to 46 a year earlier.

Four ends of Calgary recorded double-digit starts on duplexes last month with 16 in the northwest, 14 each in the southeast and southwest, and 10 in the city’s northeast.

“Although we did see an increase in multi-family starts in March, overall for the year, we are expecting a decline,” Cho says.

Over the first three months of 2017, there were 1,279 starts on multi-family homes in the Calgary area, up from 907 during the same period in 2016, says CMHC.

On the expected decline, Cho points to heavier supply on both the new and resale ends of the market.

At the end of March, for constructed but unabsorbed multifamily units, there were 1,184 apartments, 194 townhomes and 170 duplexes. A year earlier, there were 322 apartments, 148 townhomes and 123 duplexes that were constructed but unabsorbed, says CMHC.

Through the resale market, there were 1,575 apartments available in the city last month, says the Calgary Real Estate Board. This is a three per cent hike from 1,531 year over year.

For attached homes, however, inventory slid 17 per cent to 1,227 from 1,478. When CREB refers to attached homes, it’s a combination of duplexes and townhomes.

Although we did see an increase in multi-family starts in March, overall for the year, we are expecting a decline.