Trend to boost multi-family demand

>Richard Cho, senior market analyst for CMHC, says growth in housings starts is »a welcome sign.«

Richard Cho of CMHC sees declining inventory encouraging more demand for multi-family homes in Calgary. “Pricing, and the space for that pricing, is what’s drawing people to row houses,” he says (click on the photo for our two-picture gallery).
Photograph by: Files , Calgary Herald

Construction starts of multi-family homes in Calgary grew in November, but eased during the first 11 months of the year compared to the same periods last year, says a federal agency.

Shovels in the ground more than doubled this November over last, rising to 1,098 starts compared to 479 during the same month last year, says Canada Mortgage and Housing Corp.

Calgary also saw 5,701 construction starts of multi-family housing from Jan. 1 to the end of November, down 13 per cent compared to 6,542 during the same period in 2012.

Within multi-family homes, row houses and apartments saw significant increases in construction starts in November compared to the same month last year.

There were 305 construction starts of row houses in November, almost four times more than the 82 starts during the same month in 2012.

Apartment starts were 2.5 times higher in November, rising to 677 compared to 271 last year.

In contrast, construction starts of semi-detached homes were down 7.9 per cent, easing to 116 in November compared to 126 during the same month last year.

“We’ve seen an increase in rows and apartments. Semis were pretty close to what they were last year,” says Richard Cho, senior market analyst with CMHC.

“I think there’s a number of factors that have really helped support demand for row housing. The pricing, and the space for that pricing, is what’s drawing people to row houses.”

It isn’t uncommon to see apartment numbers swing from month to month, says Cho.

“We didn’t have as many large apartment projects start this year compared to last year, so they are down,” he says.

“We are expecting that to change moving into 2014. We are forecasting more multi-family units breaking ground.”

Inventory of multi-family homes has been on a downward trend, says Cho, adding this will encourage more demand for that housing type.

The City of Calgary’s building permit numbers, which show an intention to build but not actual building, show an increase in plans for multi-family projects, he says.

Source: calgaryherald.com

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