Build­ing pace de­clines

Calgary Herald New Condos - - New Condos - JOSH SKAPIN

Con­struc­tion starts of multi-fam­ily hous­ing of all kinds de­clined 62 per cent in Cal­gary in Fe­bru­ary com­pared to the same month a year ago, says a fed­eral agency.

There were shov­els in the ground on 254 units in Fe­bru­ary, down from 666 units dur­ing the same pe­riod in 2012, says Canada Mort­gage and Hous­ing Corp.

For the Cal­gary area as a whole, con­struc­tion starts of multi-fam­ily hous­ing fell 109 per cent in Fe­bru­ary com­pared to the same month last year, says CMHC.

“This is largely due to the apart­ment seg­ment,” says Richard Cho, se­nior mar­ket an­a­lyst for CMHC. “It’s not un­com­mon to see large fluc­tu­a­tions in new apart­ment con­struc­tion in any given month, de­pend­ing on how large the projects are.”

In the Cal­gary cen­sus met­ro­pol­i­tan area, 410 mul­ti­fam­ily units broke ground, down from 855 starts a year ear­lier.

Be­sides Cal­gary, the cen­sus met­ro­pol­i­tan area in­cludes sur­round­ing com­mu­ni­ties such as Air­drie, Cochrane and Ch­ester­mere.

In terms of sin­gle-fam­ily houses, new con­struc­tion was nearly the same, reach­ing 486 starts last month com­pared to 490 in Fe­bru­ary 2012.

De­spite the de­crease in multi-fam­ily hous­ing starts, 2013 has seen a strong start for condo project sales cen- tres, says pres­i­dent Char­ron Un­gar of the Cana­dian Home Builders’ As­so­ci­a­tionCal­gary Re­gion.

“There is cur­rently con­sid­er­able sales ac­tiv­ity oc­cur­ing in the multi-fam­ily sec­tor, par­tic­u­larly the down­town core,” says Un­gar.

“How­ever, un­til unit sales are met, the fi­nanc­ing will dic­tate the start of con­struc­tion.

“A con­tin­u­a­tion of strong mar­ket de­mand should trans­late into those sales tests be­ing met and a rise in those start num­bers as shov­els get into the ground.”

But Un­gar says cost in­creases have put up­ward pres­sure on multi-fam­ily hous­ing prices, adding “we need to be wary of a drop in af­ford­abil­ity.

“This could have a po­ten­tial neg­a­tive ef­fect on sales vol­umes go­ing for­ward.”

The big­gest weight on multi-fam­ily starts in the Cal­gary area came from the apart­ment seg­ment last month, which saw a 209 per cent drop.

“Apart­ments can fluc­tu­ate on a month-to-month ba­sis, de­pend­ing on what projects are started,” says Cho.

The 634 con­struc­tion starts of apart­ments in Fe­bru­ary 2o12 were fol­lowed by only 205 dur­ing the same month this year.

Town­home con­struc­tion also eased in Fe­bru­ary com­pared to a year ear­lier.

There were 95 starts last month, down 50 per cent from 143 a year ear­lier. But du­plex con­struc­tion stepped up last month, with shov­els in the ground on 110 units, up 41 per cent from 78 starts dur­ing the same time in 2012.

“Du­plexes on av­er­age are priced a bit lower than a sin­gle-fam­ily home and so they of­ten make an op­tion for in­di­vid­u­als who per­haps want more of a sin­gle-fam­ily feel but at a lower price point,” says Cho.

While multi-fam­ily starts in Cal­gary were down, across the province, con­struc­tion stepped up. Last month, there were 1,163 con­struc­tion starts, up six per cent from 1,100 dur­ing the same time in 2012.

That up­swing was largely driven by the Ed­mon­ton area mar­ket, where con­struc­tion soared 200 per cent over last year’s ac­tiv­ity.

In Fe­bru­ary, the Ed­mon­ton cen­sus met­ro­pol­i­tan mar­ket hit 659 multi-fam­ily starts, up from 219 dur­ing the same time in 2012.

Cal­gary Her­ald/files

A condominium project un­der con­struc­tion in Cal­gary.

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