Clean slate

With 2011 now in the books, signs point to a better year ahead

So, here we go again.

The slate has been wiped clean. While it will be remembered as a year of frustration, the 2011 ledgers have been initialized and closed off. And coming into 2012, there is a renewed sense of optimism in the housebuilding community.

From one corporate boardroom to another, builders have finalized plans for countless new show homes in several new developments and new phases to developing communities this year.

Sterling Homes’ general manager Bill Bobyk, for instance, says the company has 19 show homes under construction for spring openings and about 300 housing starts over this year — about 30 or 40 more than in 2011.

Alan Klassen, president and operating partner of Albi Homes, has seven new show homes ready to come on stream this year — which he describes as a “turnaround year” for the company.

And behind all the pre-game hype, are economic projections for stronger in-migra-

Full-time job growth has returned, boding well for housing demand.

RICHARD CHO, CMHC

tion, strengthening employment growth, continued low interest rates, and a healthy energy sector.

“The job market in Calgary has benefited from the elevated price for oil,” says Richard Cho, Canada Mortgage and Housing Corp.’s senior analyst for the Calgary market.

He says that after closing out 2011 with a job growth rate of 2.9 per cent, 2012 will see another jump of 2.4 per cent.

“Full-time job growth has returned, boding well for housing demand,” Cho says, adding that full-time job growth has been a problem for the past couple of years.

When people are confident of their job futures, they tend to be more inclined to purchase big-ticket items.

A look at housing-start figures from CMHC to the end of November 2011 show the year-over-year gap in the single-family detached sector is the narrowest it has been all year — at about 15 per cent.

The multi-family sector, though, is running ahead of 2010 levels by more than 11 per cent.

CMHC will be releasing its 2011 year-end starts figures in a few days.

But back to the economic indicators presented by CMHC.

Not only are there more jobs, but those jobs are paying better — again benefitting housing.

Average weekly earnings reached a record $1,002 in August, thanks to higher-paying full-time jobs in sectors like energy.

“The gain in earnings will help prospective buyers move into homeownership and help existing home owners continue to cover their monthly carrying costs,” says Cho.

Then there are those who have, and will, come to Calgary from other parts of the country to work.

Net migration to Calgary was expected to hit 15,500 in 2011, and then climb almost 10 per cent to 17,000 this year.

“The increase in migration will support demand in the new home, resale, and rental markets,” says Cho.

Given all this, the building industry is optimistic.

But there remains the big question mark: will consumers catch that same bug of optimism?