Homebuilders expect happy 2013 in Calgary
Buyer confidence and consumer-friendly marketplace lends optimism in New Year
“Better than expected” is the way many builders and developers described Calgary’s residential market in 2012.
And when asked to gaze into their crystal ball for an outlook on the upcoming 365 days, many are expecting the Stampede City to hold its place as an appealing place for the housing industry.
“I’m really bullish on the residential market going into 2013,” says Lesley Conway, president of Hopewell Residential Communities.
In 2012, Hopewell Residential Communities announced plans for a new southeast Calgary community called Hotchkiss, which is being named in honour of the city business leader and philanthropist Harley Hotchkiss and his family.
Much of the planning for this community will be done in 2013.
Hopewell Residential is also the developer behind other southeast Calgary subdivisions called Copperfield and Mahogany. Conway says 2012 was Hopewell Residential Communities’ “best year yet,” for its Calgary, Airdrie and Edmonton communities.
“We’re really optimistic about 2013,” she says.
Her glowing look at the upcoming year is based around buyer confidence and the perception of a marketplace that’s consumer friendly.
“I think as homebuyers have seen the strength in the Alberta market, they are gaining more confidence that it is a good time to move,” says Conway, adding the market has been “soft” for several years.
But with a stronger economy, continued low mortgage rates, job security and job growth, “all of the great fundamentals are there,” she says.
When the economy dropped in 2007, that took a toll on sales numbers for many big ticket items, including new homes.
But each year since 2009, the number of construction starts on homes of all kinds in Calgary have been on the rise.
However, that’s expected to end in 2013. Canada Mortgage and Housing Corp. estimates the Calgary census metropolitan area will ease four per cent in total housing starts in 2013 compared to its expected total in 2012.
Besides Calgary, the area includes outlying communities such as Airdrie and Cochrane.
Following an expected 12,400 total construction starts this year for housing of all kinds, CMHC says construction of new homes in the census metropolitan area will fall to 11,900 starts next year.
But senior market analyst Richard Cho says despite lower construction start totals, Cal- gary’s in line for “another active year” in 2013.
He points to the eased totals as a result of elevated construction starts in multi-family developments in 2012, resulting in the housing industry moderating its activities this year.
By the end of last year, Cho expected the Calgary area’s multi-family housing construction starts would reach 6,700 units — the second highest total since 1981.
“I feel the market is balanced and there is the potential for growth,” says Charron Ungar, president of the Canadian Home Builders’ Association-Calgary Region. “I think 2012 was better than expected and if it tapers off a little bit … we don’t necessarily want to be in a boom situation again.”
However, Ungar says growth is a good thing for the housing industry and all signs point to the fact that Calgary will grow.
But with growth comes the need for the hands to build the homes.
A long-standing concern for the industry that is expected to trickle into the new year has been a shortage of skilled labour in the province — in particular, framers and cribbers.
That includes 2012, when builders continued to voice concern over the availability of labour.
“We’ve had a lot of guys retire and there wasn’t enough and still isn’t enough new people coming up through the ranks to fill the gaps,” says Ungar.
“Has the industry been proactive in getting more people involved in it? Absolutely.”
A group of the city’s home building leaders teamed up on a major donation to help fund the SAIT Polytechnic’s Trades and Technology complex, which consists of three new facilities expected to offered expanded programming for those seeking a career in construction trades.
But more can be done by the federal government to attract skilled workers to the country, says Ungar.
“I think the government should modify the guidelines identifying skilled labour for immigration into Canada,” he says — for example, “identifying that a carpenter can also be a framer or a cribber.”
Another challenge entering 2013 is land supply, says Conway. Many builders and developers have pointed at city hall’s approval process as a stumbling block for adding phases or opening new communities.
“I think many developers are in the acquisition mode, ourselves included, and that does continues to be a challenge inside the city of Calgary and its surrounding area,” says Conway.
“The approval process continues to be a huge challenge — the conditions placed on approvals and the process taking a lot longer than it should be, not necessarily adding value to the process, just slowing it down.”
However, Conway says she hopes changes are on the way.
“I know there is a commitment at the municipal level to improve the process so I am encouraged and hope we see some improvement in 2013,” she says.
In the coming year, WestCreek Developments is expected to open the first phase of a planned community in the city’s south called Legacy. Upon completion, Legacy will include about 6,500 homes on 405 hectares.