‘Steady’ year for condo options
Demand to remain strong in 2013 as housing construction to ease
The new year will hold more options for Calgary homebuyers to feed the growing appetite for multi-family housing.
It’s an appetite driven by a variety of factors — more residents, pressure to create higher-density housing, the rising cost of single-family homes, and people’s personal preferences.
While condo construction starts are expected to slow in 2013 compared to the red hot year in 2012, they should remain within historical averages.
The year will see more planning around density in the city, with more multi-family options being a big part of the conversation.
As well, there are plans afoot to change building regulations to allow different forms of multi-family structures.
In Calgary, 2012 closed out at an almost-record year for construction starts of multi-family housing, says Canada Mortgage and Housing Corp.
“Multi-family construction has been strong in 2012, with starts forecast to reach its second highest level since the early ’80s,” says senior analyst Richard Cho of CMHC. “The biggest difference this year (2012), compared to the last couple of years, has been the number of apartment units that have broken ground.”
Starts of everything from duplexes to townhomes and apartments have steadily increased during the past three years.
Apartment starts more than doubled from January to September 2012 compared to the same period in 2011, rising to about 3,400 starts from about 1,400.
The increase in construction starts of apartments is a trend that began in the middle of 2011, says Cho.
CMHC expects multi-family apartment starts to moderate in 2013, but remain within historical averages.
“The increase in the supply of multi-family units will inhibit some new construction in 2013,” says Cho.
“Calgary’s economy has produced jobs for many prospective buyers and attracted a lot of migrants to the region. Combined with low mortgage rates and rising incomes, housing demand is expected to remain steady.
“Multi-family units will continue to be a good option for a variety of prospective buyers, such as first-time buyers and those who want to downsize.”
Two conversations — on increasing housing density and allowing six- to eight-storey woodframe buildings — will dominate development talks in the coming year.
Rollin Stanley, Calgary’s general manager of planning, development and assessment, has been promoting increasing density to fund infrastructure, along with the idea of changing the building code to allow six- to eight-storey wood-frame buildings.
These are cheaper to construct than concrete buildings the same size, and they increase density to make better use of existing infrastructure — thus increasing the tax support for infrastructure.
They will also have a benefit for the immediate community by having the ability to offer retail on the first floor — a convenient neighbourhood place to buy that litre of milk or bottle of wine.
At both the local and provincial level, the Canadian Home Builders’ Association is exploring with stakeholders a change to the building code to allow for sixstorey wood-frame buildings that could have mixed use, with retail or office on the main level and residential above.
“What’s good about it is it gives you the ability to densify and keep the price down and the affordability up,” says Charron Ungar, president of CHBA –Calgary Region. “I think that’s a great product to be able to introduce into the marketplace. I support that wholeheartedly.”
Ungar, who is also the head of Avi Urban, sees this type of building as a boon for established areas, but is more cautious about its potential in newly developed or green field areas.
“The potential for it in the green field, you never know,” he says.
“It might be too big, too high from say, a typical two-storey home — that transition may be too much, but there might be areas where that works quite well.”
Ungar brings up a further consideration in the conversation about intensifying corridors, one that affects the “how” of what is built.
“There is a disconnect now between the kind of product those corridors are being designed for and the ability to build that kind of product,” he says.
“It’s designed now for a concrete product, so we need to be able to build a wood-frame product. But right now, the affordability numbers aren’t there.”
With Calgary’s young, vibrant population, the urban lifestyle is starting to pick up steam.
Condo tower projects downtown and the redevelopment of neighbourhoods ringing the city’s core are servicing that growing interest.
Other buyers are downsizing from large family homes and are looking for something smaller, with less maintenance, but located in the middle of a vibrant, walkable community.
In East Village, two projects are underway — Evolution by Embassy Bosa Inc., and First by Fram+Slokker Developments.
Evolution is focusing on launching its second phase in 2013, says Natalie Bosa, marketing and quality control manager for Embassy Bosa Inc.
“I think we’re going to see more interest as Calgarians warm up to the urban living aspect, where you can have a different lifestyle than what most are seeing right now, with a community of this type,” she says. “Once people come down to the village and see the changes, and start to envision what is going to happen, and what eventually will be the East Village and the dynamic environment, I think we’re going to see more interest.”
Along the theme of increasing density, both the inner city and the new suburbs have found receptive audiences to multi-family developments.
Streetside Development Corp. builds in both locations, with St. John’s Tenth St. in Kensington adding 95 apartment-style condos to that established neighbourhood, while the company launched projects in new neighbourhoods in 2012.
These include Redstone, The Edge and Hunter House.
The company also launched Red Haus, its last building at its Royal Oak site.
“There’s a bit of tradition with the Red Haus apartment style and some new innovation with our new condo product at Hunter House,” says Lisa Feist, vice-president of multi-family development for southern Alberta for the company.
“Our overall sales for the year was over 200 and we moved in 125 new homeowners.”
She is positive about Streetside’s projects coming up for 2013. “We are forecasting to release our Evanston apartment, as well as our Inglewood project,” she says, again referencing a new neighbourhood in the same breath as an established one. “We have a few new sites that are too soon to release details about, but we expect (2013) to be a busy year again.”
Along these lines of new, vibrant multi-family projects in venerable neighbourhoods, this year will see the official sales launch of new projects. Watch for the new 1912Cross building in M2i’s Development Corp.’s SoBow project in Inglewood.
And Bucci Developments, a Vancouver developer with Alberta roots, is looking to Kensington for its new multi-family project following on the heels of its acclaimed Next project in Bridgeland.
With the interest in density, and new land become harder to come by, some builders are testing out the waters in the infill market.
Brookfield Homes, which previously only built in suburban neighbourhoods, launched an infill project of eight duplexes, called Axio on 12th, in the innercity neighbourhood of Bridgeland in 2012. The company plans to continue looking for opportunities in the inner city.
Value is driving many people’s purchases of multi-family, a decision-making process that holds true at the luxury end of the market, too.
With each sale at The River, a luxury condo tower and townhome project on the Elbow River in the community of Mission, it is breaking records on price per square foot.
This year, The River is getting ready to launch sales of river homes in Phase 2. The extra time in releasing these for sale has allowed the team to make changes and improvements to the plans, says Anne Clarke, director of sales at The River.
With the project well underway — it broke ground in November — developer Ledcor Group of Companies is actively looking for more land for a new multi-family project.
“We are committed to Calgary and to establishing (Ledcor’s)
We are committed to Calgary and to establishing (Ledcor’s) multifamily market
place. ANN CLARKE,
THE RIVER
multi-family marketplace,” says Clarke. “We will continue to search out great locations so that we can build upon our amazing city and provide that legacy that Ledcor is so proud of in other cities, such as in Vancouver, where we did the Shangri-La, or in Maui where we did the Honua Kai, and of course, The Bow, a quite well-known building in our city. Our journey now is being able to find great locations.”