Big houses in 2016, just a lot fewer
New home construction in Medicine Hat suffered a severe contraction in 2016, but homes built saw expanding budgets and big squarefootage.
Figures from the city’s planning department seem to suggest that while the number of detached-home permits issued last year fell by half to a 15-year low, the average size of a new home grew by 15 per cent.
“We did still see larger homes continue to come forward,” said Kent Snyder, general manager of planning, building and development services for the city.
“The starter and mid-sized homes just weren’t happening but larger homes didn’t seem to be affected.”
By all accounts, 2016 was a slow year, with local detached-home permits falling to 46. That is less than half he 100 permits issued during a slow 2015, or one quarter the recent high of 187 in 2013.
At the same time though, the estimated construction value attached to the average permits rose to $317,400 (not including lot price). That is 16 per cent higher than the average price of $274,600 in 2015.
Those figures are not from an actual construction budgets, but a standard persquare-foot cost estimate used to calculate permit fees.
It does however, reflect square footage, and bigger means more expensive. Since larger homes typically have more costly finishes and features, the actual dollar budget increase “could be much higher,” said Snyder.
Around town, the difference is more obvious considering large in-fill houses on First Street SE, new construction in posh Canyon Creek in the southwest and other areas of the city.
“It only takes a few of those to skew the numbers,” said Rob Whitten, president of the Canadian Homebuilders Association in Medicine Hat.
He said the small number of permits may be a factor but his members have also seen a trend of higher-end construction inside the city and in the region.
As for 2017, he predicts a pivot year back to a broader array of projects and more activity, though the starting point is very low.
“(2016) was the worst for permit counts, so it’s pretty easy to say that we’ll do better than that,” said Whitten. “But I really think we will. We’re at the bottom, and maybe not in growth mode yet, but we’re transitioning.”
Through three months of 2017, permit numbers are tracking slightly higher than the same period in early 2016.
And more land seems to becoming available with more interest.
In January, Lansdowne Equity announced it would move ahead with at least 21 new lots in its Hamptons community in May, and possibly as many as 45 if presales were strong.
The city’s land and properties office reported this week that it sold 16 lots in the first quarter of 2017, compared to 24 all last year (its budget target is 40 lot sales in 2017).
Whitten’s company, New Rock Developments, plans to begin servicing its new detached condo community in Southlands this spring. The CHBA is planning for at least five, perhaps six entries to its Parade of Homes next fall.
“The health of the development community in Medicine Hat is looking more positive, but I’m not sure we can predict dynamic change,” said Snyder, who says the residential building sector may continue to struggle, but strong commercial and industrial activity should carry on from a very strong 2016.