Growing population fuels demand for new multi-family homes
Population growth driven by Alberta's strong economy is fuelling development in Calgary's multi-family housing market, be it for rental or ownership, a new report shows.
Zonda Urban recently published its State of the Market report for the province, noting both facets of the multi-family market are seeing strong growth.
Driving growth on the purpose-built rental side of the new market is rising rents, which rose to $2.99 per square foot in the second quarter of this year from $2.57 per square foot in the second quarter of last year, an increase of about 16 per cent year over year.
The report noted that migration is fuelling demand for rentals and housing in general, in part from rising energy prices that drive economic growth, though that tailwind has been less robust this year compared with 2022.
Conditions have led to lower vacancy rates in new, stabilized projects. The report says the vacancy rate in Calgary's new homes market has fallen to 2.2 per cent this year from 5.7 per cent in quarter 2 last year.
Demand for new multi-family homes have been equally strong, with 1,658 sales in the second quarter of the year.
Among those multi-family sales for ownership were 559 townhouses versus 211 concrete units and 888 wood-frame apartments.
That's the highest level of sales for wood-frame apartments in the last eight years, the report indicated.
Due to high demand, average prices have also increased, up 2.5 per cent year over year, to almost $438,000.
By comparison, Edmonton's multi-family market, while seeing stronger demand for new rentals, has seen substantially lower demand for new multi-family homes for ownership with 89 new townhouses, 30 wood-frame apartments and five concrete units sold in the second quarter.