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December 01, 2014

Hope at Large: Room for growth

Calgary sees strong demand for both inner-city and suburban condos

Marty Hope

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No need for the showdown at high noon, this town is big enough and active enough that there's room for multi-family development regardless the location.

Okay, there are some developments better suited to the core, but at the same time suburbia also has its strong points — and strong supporters.

Overall, though, with an estimated 40,000-plus newcomers hanging their hats in Calgary annually, and with single-detached home prices steadily climbing, lifestyle is edging its way deeper into the multi-family spotlight alongside affordability.

Tim Logel, president and partner in Cardel Lifestyles, says show home visitors are considering many different options — some comparing inner-city living against the suburbs.

"Some of the reasons they buy from us in suburban multi-family developments are because they want open spaces, park and trails, or they want to be close to family," he says. "But most importantly, they cannot afford to live close (to downtown) in which is, on average, double the cost when you compare prices of (suburban) condos of comparable size and quality."

Brookfield Residential's Trent Edwards, chief operating officer for Alberta, says company research shows a 'healthy growth' in condo demand, but at the same time also shows people want choice.

"Many of our home buyers want the downtown core, others are first-time buyers, young families with kids and requiring suburban neighbourhoods," he says. "We need to look at all solutions — both intensification and suburban development. Bottom line is we want them to make Calgary their home, not another municipality, therefore we need to offer choice and affordability."

So, given all of this, just how strong is the Calgary market for the multi-family sectors?

Short story response is hot. Really hot. No need to look any further than figures from Canada Mortgage and Housing Corporation for supporting evidence.

Since releasing its spring Housing Market Outlook, the federal housing agency has had to revise its multi-family starts forecast upward for the Calgary area.

By the end of this year, multi-family starts are forecast to reach 9,000 units, up 46 per cent from 6,182 in 2013, and about 1,000 above the original forecast, says Felicia Mulheardy, acting senior market analyst for Calgary and surrounding areas.

"This will represent the strongest performance for multi-family construction since 1978," she says.

And the reasons for the uptick in multi-family construction, Mulheardy adds, are the same one-two combination that is typically at the forefront in Calgary — elevated net migration and hefty employment growth.

"As well, lower supply levels have provided builders with an incentive to start additional project," she says.

Avi Urban is one of those developers who builds in both the inner-city and suburbs — because the demand is there from various demographic sectors.

"Our suburbs, as well as our established communities, are vibrant places to live rich in diversity of both built forms and demographics," says Avi Urban president Charron Ungar. "As an industry we need to ensure we do whatever possible to ensure our city remains that way for generations to come."

Guy Huntingford, chief executive officer of the Urban Development Institute in Calgary, says industry and city officials have been working together to see what types of housing are needed now and moving forward.

And the answer is all types, in all areas of the city. The reality is that we need to meet the growth pressures of the 40,000-plus people moving to Calgary annually. Growth is good news and our industry is ready to meet the challenges and requirements of all new home buyers," he says.

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