Building pace declines
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.
A condominium project under construction in Calgary.