Saturday, October 11, 2014

Building Permits and Housing Starts on the Rise

The line from the famous movie is “if you build it, they will come” but it seems these days in the city of Calgary, it is more like ‘they are here so you have to build it’. Doesn’t have quite the same ring as the original line, and it’s probably not going to catch on anytime soon, but it is ringing true to the builders and developers all over the city and surrounding areas. With net migration on the increase, low rental vacancy rates and house prices continuing their upward trend, there is no wonder developers are looking for more and more permits to have in place for their many new construction projects.  In reports recently released, both building permits and housing starts using those permits are on the rise, not just in Calgary proper but in the whole province of Alberta as well.

Alberta and Calgary led the nation in growth for total value of building permits in August of this year. Year over year, this past Augusts saw 44% more building permits granted than in August of 2013. The Calgary metro area saw gains of 44.3% in the permits, with $803 million registered while the province itself saw an increase of 31.4% with a total registered total of $1.8 billion.

Further broken down, residential permits for the city itself totalled $473 million while non-residential permits totalled $330.3 million. These residential permits rose 32.34% from August of 2013 and 16.59% from July of 2014. On the non-residential side, the permits were up 65.76% from August 2013 and up 1.04% from July of this year.

Looking at all of Alberta, residential permits were up 34.4% to $1 billion and non-residential were up 27.3% to $727 million.

Across the country, total building permits in August were up just 2.4% from this time last year and totalled $6.7 billion. The residential part of the equation in all of Canada was up 4.3% from August of 2013 to $4.2 billion while the non- residential part was up just half a percent to $2.5 billion. They may be building all across our great nation, but the figures don’t lie—they are doing a heck of a lot more building in Alberta and particularly Calgary, which is great news for the real estate market as more and more properties are going up both in the single family and multi -family category.

In fact, it is the multi-family part of the equation that is pushing housing starts to their new higher levels, especially in the city itself. The Canada Mortgage and Housing Corporation’s new report shows that there were 1,042 multi-family starts in the Calgary metro area in September of 2014. This is up from 309 units just last year. What a difference a year makes! Total housing starts were up to 1,528 for the month of September which is up from just 904 in September 2013. With the multi-family market picking up steam, it has taken over from the single detached market, which saw a decrease from 595 starts in September of 2013, but only 486 this past September. The low volume of complete units coupled with the low vacancy rental rates across the city are both factors that supports multi-family dwelling construction. Right now in the city, there are several big projects that are in the construction phase that when completed hope to house thousands of new residents each.

Year to date numbers show that total housing starts-- those across all genres-- are up 8,833 to 13,803 from the same time last year. The multi-family sector is up to 8,731 units from 4,010 year to date last year while the single detached sector is up 5,072 units from 4,823 units last year. Total starts in the city of Calgary are at 18,504 units in September while August of this year saw 18,939 starts.

If you build it they will come, and they will keep coming to the great province of Alberta and the wonderful city of Calgary for years to come. And in the near future, when these projects are completed and more approved, they will all have plenty of choice in where to call home.