SLOW SPRING, GOOD SUMMER
COVID-19 squeezed new home sales for a few months, but the market has roared back, builders say
In the new normal, Edmonton homebuilders are finding that there’s no place like a new home.
Despite being in the midst of a pandemic, some of those in the residential construction industry are experiencing record sales and strong demand from those seeking to buy a home, specifically one that hasn’t been lived in.
“June, July, and August have allowed us the opportunity to help many families find a home,” said Micah Dueck, Homes by Avi’s sales manager for Edmonton and region. “We are experiencing a volume of interest and purchase that is rather atypical for the season. I believe this is due to some pent-up demand on behalf of clients that were intent on a move but did not have the confidence to move forward in March and April.”
Similarly, Jayman Built has also experienced a strong bump in interest.
“We have seen significant increased demand in people wanting to buy former show homes and pre-built spec homes,” said Dave Desormeaux, Jayman’s president. “The feedback we are getting is that some want a new home for immediate possession due to COVID -19 reasons, the belief they are cleaner and have not been lived in.”
Yet another local builder, Kimberley Homes, reports this past June was its busiest ever — and that dates back to 1989.
A number of builders, including Jayman and Averton Alberta, noted any previous dissatisfaction with existing homes was heightened because people were essentially locked down in the earlier stages of COVID -19.
Families realized that they were now using their homes differently. What was once comfortable, said Averton president Paul Lanni, was no longer comfortable.
“If a living area felt imperfect six months ago, it likely feels exponentially more so after months of limited activity outside of the home,” added Dueck.
Some decided apartments and condos were out, said both Lanni and Dueck, with buyers often citing a desire to avoid common areas, elevators, and other worry-zones identified through today’s new pandemic lens.
But those aren’t the only factors at work. Multiple builders pointed out historically low interest and mortgage rates are allowing purchasers more financial freedom and make now the right time to buy.
Then there was this viewpoint, unique to Jayman among builders interviewed.
“We also believe customers are getting nervous about tax increases, and specifically a consumption tax like a PST being inevitable in Alberta due to the economic impact of COVID -19 and government debts being accumulated,” said Desormeaux. “Depending on the tax this could increase the cost by six per cent to eight per cent.”
Hillview Master Builder, meanwhile, said it keeps getting asked if there is a COVID discount with buyers under the belief the pandemic has put builders in a position where they need to provide one. Rather, Hillview’s partners Nathan Drennan and Al Hebert point out the cost of building materials is going to go up as some plants had to shut down or reduce operations, and there’s been a big boost in home renovations resulting in a raw material shortage — lumber, for example, is harder to come by, they said.
As to what’s making buyers feel more at home in their new purchases, none of the builders talked to said they have yet brought out new floor plans due to the way COVID-19 has changed how we live. But they’re considering possibilities like a home office with a separate entrance so that people aren’t coming into the rest of the house or a room where you could disinfect items, if demand warrants it.
However, home offices, said Lanni, will likely get more of a focus. He said the industry had been moving away from larger work spaces as technological advances means we’re on smartphones and tablets rather than desktops and large screens. Now that flex space, even if it is a pocket office or a Zoom room, is taking on more importance once again.
“I also personally believe that COVID-19 has triggered people to not procrastinate about buying a new home because one thing we have all learned during COVID, is that family, and your home, is a critical part of everyone’s life,” added Desormeaux. “People have realized they do not want to sacrifice this.”