Low supply of resale houses boosts demand
A series of fresh forecasts and building statistics Thursday further cemented the view that Calgary’s new home construction industry is entering 2014 on solid footing.
Statistics Canada reported the Calgary region had the highest annual rise in new home prices during November.
Its new home index showed prices in the Calgary metro area increased 6.5 per cent from a year ago. Nationally, prices increased 1.4 per cent. Separately, new reports on local building permit values and housing starts were also positive.
“For us, as a combined housing and land development company, we have had one of our best years ever in 2013,” said Lesley Conway, president of Hopewell Residential Communities, which holds significant land in southeast Calgary with houses being built in Mahogany and Copperfield. “I’m expecting more of the same going into this year.”
Population growth spurred by job growth across the region continues to push up prices and construction, said analysts, including Richard Cho of Canada Mortgage and Housing Corp.
“Supply in the competing resale market has come down, which has also boosted demand for new homes,” Cho added.
CMHC said Thursday that housing starts in the Calgary region ended 2013 slightly down from a year ago, despite an increase in singledetached home construction. Total starts for the Calgary CMA were 12,584, off about 257 from 2012. The single-detached market gained more than 440 homes from the year earlier.
“Even though there was some uncertainty and continues to be some uncertainty in the oil and gas sector … we continue to see growth, job growth and people moving here,” said Hopewell’s Conway.
“They see it as the land of opportunity coming here from other places in Canada.”
Robert Kavcic, senior economist with BMO Capital Markets, said annual housing starts in the country finished at 188,200 units in 2013, down from 215,000 the year before. It was the lowest full-year tally since 2009.
“Total housing starts in 2014 are forecast to rise, and the number of building permits we have seen thus far would suggest the same,” said Cho about the Calgary market. “We are also expecting employment and migration to continue supporting demand for new homes.”
Building permits soared in the Calgary region in November, posting one of the highest annual increases in the country, according to Statistics Canada. The federal agency said permits reached $645.2 million for the Calgary
CMA, up 75 per cent from November 2012 and 5.6 per cent on a monthly basis.
Year-to-date, residential permits in the Calgary region have risen by 32 per cent to $3.97 billion while non-residential permits are up by 36 per cent to $2.5 billion.
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