Con­struc­tion pace on the rise

Multi-fam­ily in­crease halts down­turn

Calgary Herald - Calgary Herald New Condos - - New Condos - JOSH SKAPIN

May marked the first month in 2013 where con­struc­tion starts of multi-fam­ily hous­ing were higher than the same time last year, says a fed­eral agency.

Af­ter four straight months where multi-fam­ily hous­ing starts were on the down­turn com­pared to the same month a year ear­lier, new con­struc­tion climbed 11 per cent in May in the Calgary area, says Canada Mort­gage and Hous­ing Corp.

There were 519 starts last month in the Calgary cen­sus metropoli­tan area, up from 466 dur­ing the same pe­riod last year. The area in­cludes ac­tiv­ity in sur­round­ing towns and cities such as Air­drie, Cochrane and Ch­ester­mere.

“The trend of to­tal hous­ing starts in­creased slightly in May due to strong con­struc­tion in both the sin­gle-detached and multi-fam­ily mar­kets,” says se­nior mar­ket an­a­lyst Richard Cho of CMHC.

To­tal hous­ing starts were 1,078 in May, up 13 per cent from 949 dur­ing the same month last year.

But to­tal multi-fam­ily hous­ing con­struc­tion from Jan. 1 to the end of May de­clined 68 per cent to 2,119 units, down from 3,561.

By com­par­i­son, con­struc­tion starts of multi-fam­ily homes in the Ed­mon­ton area out­paced Calgary by 89 per cent, with 4,005 units on the go from Jan. 1 to the end of May.

The lag­ging to­tal pro­duc­tion of multi-fam­ily de­vel­op­ment in the Calgary area this year is due to an over­all de­crease apart­ment con­struc­tion, says Cho.

“Build­ing per­mits to­wards the end of last year and into the be­gin­ning of 2013 some­what in­di­cated that we were go­ing to see a lower level of multi-fam­ily starts, which we have seen so far,” he says. “For the year, we are ex­pect­ing to see a de­cline in multi-fam­ily con­struc­tion, mainly due to fewer apart­ments.”

But last month, the in­crease in to­tal multi-fam­ily hous­ing starts was car­ried by a 33 per cent up­turn in apart­ment con­struc­tion.

There were 323 starts for condo apart­ments last month, up from 242 in May 2012.

“For most of the year, (du­plexes) and (town­homes) have been gen­er­ally up year-overyear and it’s been the apart­ment com­po­nent that has been pulling the to­tal multi-fam­ily num­ber down” says Cho. “But in May, we had the apart­ment in­crease, which helped the num­ber fin­ish higher than last year.”

Along with apart­ments, con­struc­tion ac­tiv­ity on du­plexes was also higher last month com­pared to 2012. There were 106 starts in May, up 32 per cent from 80 starts dur­ing the same month last year.

Town­homes saw the only de­cline, with 90 starts last month, down 58 per cent from 143 a year ear­lier.

Calgary Her­ald/files

Con­struc­tion starts of multi-fam­ily hous­ing rose to 519 last month, up 11 per cent from May 2012. RICHARD CHO, CMHC

cal­gary­her­ald.com

Richard Cho, se­nior mar­ket an­a­lyst for CMHC.

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