September 25, 2020

Condo builders enjoying surge

Calgary construction pace for 2011 has surpassed earlier prediction
By Marty Hope, Calgary Herald December 31, 2011

As the weather cooled heading into winter, the 2011 multi-family housing market in Calgary heated up.

“We had quite a surge in apartment construction in the past couple of months,” says Richard Cho, senior Calgary market analyst for Canada Mortgage and Housing Corp.

Early this fall, the federal agency predicted that 3,500 multi-family units – apartments, semi-detached homes and townhouses – would be started this year.

But that total was surpassed in November, when the total since Jan. 1 was 3,703 units. “The uptick came earlier than we expected – maybe a couple of months earlier,” says Cho.

So when the count for December is made, the total will likely be above 4,000 units.

While the overall market has been affected by news of the world debt crisis, volatility in equity markets and negative news from the U.S., homebuyers are coming back to the marketplace, says Doug Owens, general manager of Calgary multi-family housing for Brookfield Homes.

“I think there is a depth of people who have been waiting for what they feel is the right time to buy and have grown accustomed to the news – and are not letting it affect their purchasing decisions to the degree it was,” he says.

Throughout the latter part of this year, Owens has seen steady sales, with more strength in November and December than expected.

“More importantly, we are seeing more first-time new home buyers shopping now than we have at any other time during this year,” he says.

Among those first-timers was Shelly Houben, who rented “forever” before buying an end-unit townhouse in the Auburn Bay Mosaic development by Brookfield.

She will take possession of it in August.

“I have a girlfriend who was buying a unit there and asked me to come take a look at it,” says Houben, who is an oil and gas industry accountant. “I liked what I saw, but wanted some changes made – and the salespeople couldn’t have been more helpful with upgrades and changes I wanted.”

What she bought was the 1,225-square-foot Carmine model with twin master bedrooms and ensuites – and a small basement for her art studio.

“The price was a huge reason why I bought and with interest rates so good, how can you not take the leap?” says Houben. “And the fact I can paint any wall I want is very exciting.”

The downtown condo market rebounded in Calgary during 2011, says Matthew Boukall, manager of residential consulting, services, and research for Altus Group.

“This year, the downtown market saw its first substantial increase in new product offering since the recession,” he says. “New projects launched in late September and early October all saw strong sales.

That strong interest in the market also spilled over to many of the existing projects which also saw an increase in sales velocity.”

The downtown market has been under-performing since the recession, despite the recovery of energy prices, completion of several major office towers and general improvement in the overall economy.

Apparently, what the market needed was a fresh injection of new inventory and projects to awaken consumers and the market, says Boukall.

“The suburban market saw sales growth from both investors and owner-occupiers, which is expected to continue into 2012,” he says.

“New projects in the south will benefit from the pending opening of the new hospital, as well as the new southeast ring road extension. There is reasonable optimism to support stronger sales in 2012, particularly in the southeast and northcentral markets.”

In addition to the announcement of some highrise developments coming out of the ground – including Drake, which is being developed by Grosvenor, and Keynote Urban Village by Keynote Development Corp. – there has been plenty of activity in smaller projects of about 100 units or less, says Cho.

All of this has stimulated the market for multi-family housing.

Streetside Development Corp., which caters to both the inner-city and suburban markets, has seen a boost in sales, particularly since the fall.

“There has been a marked increase in sales across the board (townhouses and apartments) in the last three months, which I hope is an indicator for 2012,” says general manager Don Blair.

Overall, it was a “steady but not spectacular” 2011, he says.

Meanwhile, Cardel Lifestyles easily surpassed its sales budget for 2011 of 182 sales, counting 206 closed deals.

“What we saw this year has been a continued search by apartment and townhouse customers to find value as well as the right location, design and builder reputation,” says company president and partner Tim Logel.

While not releasing numbers, Trico Communities says 2011 was a good year.

“Our multi-family projects exceeded forecast targets,” says marketing manager Clark Hogan.

Meanwhile, Ryan Scott, president and CEO of Avalon Master Builder, says some project timing issues affected activity at his company.

“Our sales this year were more or less what we expected,” he says, adding that the company is opening up a new multifamily site in McKenzie Towne.

“That site got off to a late start due to weather issues, which pushed back our show home opening by two months,” he says. “But due to strong presales, we have been able to stay on budget on that site.”

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