Analyst expects hot trend in Calgary won't last through 2010

BY MARIO TONEGUZZI, CALGARY HERALD JUNE 8, 2010 10:02 AM

According to preliminary figures released today by Canada Mortgage and Housing Corp., total housing starts in the reached 862 units, up 79.6 per cent from 480 units in the previous year.
Photograph by: Archive, Calgary Herald
CALGARY - Housing starts in May ballooned in the Calgary census metropolitan area compared with year-ago levels.

According to preliminary figures released today by Canada Mortgage and Housing Corp., total housing starts in the reached 862 units, up 79.6 per cent from 480 units in the previous year.

To the end of May, total housing starts have increased from 1,547 units in 2009 to 3,932 units in 2010.

In May, there were 634 single-detached units that broke ground, representing an increase of 66 per cent from the 382 units started in the previous year. To the end of May, new construction of single-detached units has improved from 1,175 units in 2009 to 2,804 in 2010, an increase of 139 per cent.

“Although the gain after five months has been impressive, the rate of increase is expected to moderate over the balance of the year due to higher mortgage rates, rising inventory levels, and comparatively stronger activity in the latter half of 2009,” said Richard Cho, CMHC’s senior market analyst for Calgary.

Multi-family starts in May, which include semi-detached, row and apartment units, increased from 98 units in 2009 to 228 units this year.

“New construction for semi-detached and row units has been brisk, representing the majority of multi-family production thus far in 2010,” said Cho. “Inventories for semi-detached and row units have been relatively low, providing builders an opportunity to start more of these types of units.”

Year-to-date, multi-family starts have reached 1,128 units, up from 372 units a year earlier.

Housing starts across Alberta’s seven largest centres totalled 2,127 units in May, compared to 962 starts a year ago.