Housing starts in Calgary have been on the rise since the start of 2012 and continued in July.
Last month, 734 units broke ground in Calgary, up 40 per cent on the 526 starts in July 2011, reports the Canada Mortgage and Housing Corp.
“Calgary has seen increased demand for housing due to our strong provincial economy including better job opportunities and higher wages,” says Charron Ungar, president of the Canadian Home Builders’ Association – Calgary Region.
Many areas across the province also had a rise in residential starts last month.
In Alberta, there were 2,611 starts last month compared to 1,953 starts in July 2011. Edmonton led the province with 1,098 starts, 70 per cent more than its July 2011 totals.
In Calgary’s single-family market, construction starts climbed 25 per cent, reaching 490 units in July, after only 392 starts in July 2011.
But much of last month’s surge in starts in Calgary came from soaring construction in multi-family development, including apartments and townhouses.
Construction starts on multi-family units increased 82 per cent over July 2011. Last month, 244 units broke ground after only 134 starts during the same time last year.
“The increase in multi-family starts is a reflection of the increased demand for affordable product in our city and the strong sales that sector of the market has experienced lately,” says Ungar.
“It will be interesting to see what effect the change to financing rules will play on our market in the next quarter.”
The federal government changed the maximum mortgage amortization from 30 years to 25 years, last month.
Builders have expressed concern over how that change will affect affordability, especially with first-time homebuyers.
While residential construction in July is up from the same time last year, totals are down from June.
The city saw 1,002 residential construction starts in June, an increase of 67.6 per cent from the same month in 2011.
“The pace of total housing starts has moderated from the previous month, mainly due to the apartment segment of the market,” says Richard Cho, senior market analyst for the Canada Mortgage and Housing Corp.
There were 612 multi-family unit construction starts in June.