Prices help boost demand
Duplexes and townhomes popular choice
While construction starts of apartments in the Calgary area dropped in March compared to a year earlier, starts for both duplexes and townhomes soared, says a federal agency.
Total construction of multifamily development in the Calgary census metropolitan area eased to 390 starts last month, down 39 per cent from 639 in March 2012, says Canada Mortgage and Housing Corp.
The Calgary census metropolitan area includes outlying communities such as Airdrie, Cochrane and Chestermere.
But most of last month’s decline was from a 298 per cent decline in apartment starts. There were 128 apartments underway in March, down from 510 starts during the same time last year.
“It isn’t unusual to see some larger swings in apartment starts on a monthly basis,” says senior market analyst Richard Cho of Canada Mortgage and Housing Corp. “Given the nature of some of these larger apartment projects, we will see some larger changes.”
Last year’s 510 apartment starts was “a bit elevated,” says Cho. “We don’t usually see quite that many starts in a given month. Towards the end of 2011 and beginning of 2012 we saw several hundred starts every month which led to some of the increases in the multi-family segment for that year.”
But for the rest of the multifamily market last month, construction starts climbed.
Shovels in the ground on duplexes improved 159 per cent to 140 starts in March, up from 54 during the same month last year.
“They’re a good option for a number of buyers,” says Cho about duplexes. “They offer more space than an apartment unit, on average, and have a similar feel to a single-detached home while priced a bit lower.” Townhomes also took an upward turn last month compared to a year earlier with a 62 per cent climb, reaching 122 starts compared to 75 a year ago.
“There is most definitely a strong market out there for multi-family housing,” says Charron Ungar, president of the Canadian Home Builder’s Association-Calgary Region, adding townhomes and apartments are selling relatively briskly.
“I feel that although we are not facing large scale issues with qualifying buyers, the market is dealing with issues regarding affordability,” says Ungar, who is also president of Avi Urban.
“And a sizeable proportion of multi-family buyers are doing so because of an existing demand for new housing, but a high price bracket for single detached homes. Multi-family homes are therefore the cost effective alternative to home ownership.”
Duplex and townhouse construction soared in March compared to the same month in 2012.