Es­sen­tial ser­vice sta­tus ‘crit­i­cal’ to area in­dus­try

Calgary Herald - - REOPENING CANADA - CLAIRE YOUNG cy­oung@post­media.com

The hous­ing in­dus­try in Al­berta had just shown two-and-a-half months of solid im­prove­ments when the pan­demic put a pause on life in March.

In the in­ter­ven­ing months, the hous­ing in­dus­try — from con­struc­tion to sales — has built new ways of do­ing busi­ness.

The sav­ing grace for Al­berta’s homes in­dus­try was be­ing deemed an es­sen­tial ser­vice — al­lowed to con­tinue sell­ing and build­ing homes when many other busi­nesses were shut­tered. It re­quired col­lab­o­ra­tion from com­pa­nies, in­dus­try or­ga­ni­za­tions and the lo­cal and provin­cial gov­ern­ments.

“That was a crit­i­cal mo­ment for us — if that hadn’t hap­pened, I sus­pect we would be hav­ing a very dif­fer­ent con­ver­sa­tion right now,” says Brian Hahn, ex­ec­u­tive di­rec­tor of Build­ing In­dus­try Land De­vel­op­ment Calgary Re­gion.

With the ef­forts around safety pro­to­cols, Hahn says he knows of no work­place out­breaks of COVID -19 in the BILD CR mem­ber­ship, un­like what was ex­pe­ri­enced at some other es­sen­tial ser­vices work­places.

“There was fear that all eco­nomic mo­men­tum was go­ing to stop — and it didn’t,” Hahn said of the in­dus­try worth $17.7 bil­lion in built in­vest­ment value to Al­berta.

Even so, within the BILD CR mem­ber­ship, some com­pa­nies have had to lay off staff, while oth­ers have not, he said.

Safety rules — in­clud­ing hav­ing only one trade work­ing in­side a unit at a time — have slowed home con­struc­tion time­lines by about two weeks.

“We are at about 80-per-cent ef­fi­ciency and the de­cline is not nec­es­sar­ily a short­age of prod­uct, but in terms of safety pro­to­col,” says Char­ron Un­gar, CEO of Homes by Avi Group of Com­pa­nies, which builds in Calgary, Ed­mon­ton and Austin, Texas.

The av­er­age price of re­sale homes, while lower, is a re­flec­tion of more ac­tiv­ity in home sales of $500,000 and less. Re­sales are pick­ing up in Calgary — in April there were 572 sales, while in May there were al­most dou­ble, at 1,080 sales.

While sales have dropped, so have list­ings, keep­ing prices from plum­met­ing. Ann-marie Lurie, chief econ­o­mist for the Calgary Real Es­tate Board, ex­pects sales vol­ume to re­turn by the fourth quar­ter this year to sim­i­lar lev­els as a year ago.

“We do ex­pect that price de­cline will in­crease a lit­tle bit. We es­ti­mate that to the end of the year it will be about a three-per-cent ad­just­ment com­pared to last year, which, for our mar­ket — which has al­ready faced a 10-per-cent de­cline in price over the past five years — is not in­signif­i­cant,” Lurie says.

Al­though pan­demic rules closed open houses, which real­tors were able to re­sume last week­end, real­tors were still able to tour in­di­vid­u­als through re­sale prop­er­ties.

In the new home mar­ket, mean­while, de­mand is all over the place, say some builders.

It’s hard to pre­dict if there will be a par­tic­u­lar price band that will be the most ac­tive this fall, says Shane Wenzel, pres­i­dent of Shane Homes, which builds and de­vel­ops in the Calgary area, not­ing his com­pany has seen ac­tiv­ity from multi-fam­ily to sin­gle-fam­ily in a wide range of prices in re­cent months.

In the past few years, the hous­ing in­dus­try has faced chal­lenges due to job losses in the en­ergy in­dus­try, tighter rules to qual­ify for mort­gages and even the rail strike caus­ing ma­te­ri­als and sup­pli­ers to be­come scarce for a time.

“For us, Jan­uary and Fe­bru­ary were look­ing re­ally good,” says Trent Ed­wards, COO of Al­berta for Brook­field Res­i­den­tial, a new home builder and de­vel­oper in Al­berta, On­tario and the United States. “Now, we’ve strug­gled in de­lin­eat­ing what in our mar­ket is COVID and what is the im­pact of the lower oil price. We know that the mar­ket will con­tinue to be chal­lenged, even once things nor­mal­ize on the COVID side.”

Brook­field is ex­pect­ing about half the vol­ume of sales in com­ing months, even into 2021. April saw the com­pany sell only two homes in Al­berta, but May was up to 30. “And al­ready a good start to June, and we’ll ex­pect to do a lot more than 30 in June.”

Un­gar notes that buy­ers have a lot go­ing for them in the cur­rent mar­ket. “In­ter­est rates are at an all­time low, there are houses avail­able to buy. It’s quite a pos­i­tive buy­ers’ mar­ket right now.” While sales have been half of what the com­pany pro­jected for these months, they are re­turn­ing, he says.

Dur­ing the shut­down, builders re­sponded in dif­fer­ent ways to han­dle sales. Some closed show homes, while oth­ers lim­ited the num­ber of peo­ple go­ing through at a time or of­fered tours by ap­point­ment. Oth­ers ramped up vir­tual tours so home buy­ers could still ex­pe­ri­ence the homes.

Brook­field widened the avail­abil­ity of self-ser­vice show home and spec homes avail­able to be toured 24/7 — buy­ers can book a time on­line, re­ceive a key code, tour when they want, and sales staff fol­low up with them later.

Key to keep­ing the in­dus­try go­ing was ramp­ing up on the tech­ni­cal side — cre­at­ing video tours for would-be buy­ers, us­ing video chat to con­nect sales­peo­ple and buy­ers, even video in­spec­tions of con­struc­tion by the City of Calgary.

“See­ing the de­mand for tech­nol­ogy for cus­tomers to be able to shop and build and price a home on­line, and ul­ti­mately pay for one on­line one day, we’re try­ing to ac­cel­er­ate the plans we had in place,” Ed­wards said. “That was go­ing to be a threeto five-year process, but now we’re try­ing to get it done in 18 months.”

We’re see­ing Cal­gar­i­ans, Ed­mon­to­ni­ans, peo­ple from Red Deer. Peo­ple are say­ing they’ve wanted to come in sum­mer, but there are al­ways too many peo­ple. So lo­cals are fi­nally get­ting to see the place in its sum­mer glory.

Scott Her­gott, ex­ec­u­tive chef, Banff Prop­er­ties Pur­suit

JIM WELLS

Brian Hahn, of Build­ing In­dus­try Land De­vel­op­ment Calgary Re­gion, says safety rules may have slowed home con­struc­tion by about two weeks, but he knows of no COVID-19 out­breaks among his mem­ber­ship.

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