Calgary’s homebuilding industry is on pace to register its busiest year since 2006 while at the same time meeting the challenges of a labour shortage in the city.

Despite the high level of activity, combined with a current labour shortage, the industry is responding well to the increased housing demand.

A recent Canada Mortgage and Housing Corp. report forecasts housing starts in the Calgary region to increase by 24 per cent this year to 15,600 which is the highest number of total starts since 2006 when there were 17,046. Homebuilders have been quite busy for the past three years. In 2012, there were 12,841 total starts followed by 12,584 total starts in 2013.

Absorptions, which are defined as when properties are completed and occupied, hit a recent high of 13,945 in 2003. There were 11,946 in 2013. Year-to-date until the end of July, the Calgary CMA had 7,723 absorptions, up from 6,606 for the same period last year.

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Calgary’s resale condo market is booming these days with the annual growth in transactions far outstripping the pace in the single-family sector.

That is also sparking what could be a record year for new construction in the multi-family segment of the housing market.

The market for Calgary condos has been strong through 2014. It’s up over 20 per cent year-over-year and we expect demand to continue as buyers and the inventory available becomes more sophisticated. More demand are expecting from local buyers who are increasingly aware of the benefits of the condo lifestyle: convenience, security, unique amenities and proximity to the city’s downtown.

The Calgary economy is also attracting professionals from cities like Vancouver and Toronto, who regard Calgary condos as affordable and attractive alternatives to the highly-developed condo markets they are coming from. At the same time, pre-sale condo developments like The Guardian are attracting buyers and investors not only locally, but from other major cities, as Calgary’s real estate market becomes renowned as a stable place to invest.

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Calgary continues to far outstrip the rest of the country when it comes to annual price gains in the resale housing market.

 

The MLS Home Price Index, released Friday by the Canadian Real Estate Association, said prices in the Calgary area in July were up by a whopping 10.48 per cent compared with a year ago. Meanwhile, the national aggregate, comprising 11 centres, saw a year-over-year hike of 5.33 per cent as sales rose to their highest level since March 2010.

 

The closest centre to Calgary’s annual spike was Toronto which recorded a jump of 7.88 per cent.

 

Over the past three years, Calgary also has the highest rate of price growth at 25.01 per cent compared with 12.52 per cent nationally. And over five years, Calgary’s 28.89 per cent spike is second only to Toronto’s 40.48 per cent increase while it is 26.89 per cent across the country.

 

Immigration and population growth to begin to affect the resale and new housing markets. Also, a demand/supply imbalance has contributed to higher prices.

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The value of building permits in the Calgary region ballooned in June to more than $800 million, according to Statistics Canada.

 

The federal agency reported Thursday that permits hit $811.7 million during the month in the Calgary census metropolitan area, an increase of 26.6 per cent from May and up by 51.3 per cent year-over-year.

 

The Calgary region was buoyed by the non-residential sector which saw permits of $478.5 million, up 135.3 per cent from May and an increase of 147.7 per cent from last year.

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The inner-city area of Calgary is proving to be a hot market for the construction of new single-family homes this year.

According to data by Canada Mortgage and Housing Corp., year-to-date until the end of June, there were 204 single-detached starts in the city’s ‘centre’ zone this year, which has increased by 35.1 per cent compared with a year ago.

Since 1999, the highest ever yearly total for starts for single-family homes was in 2006 at 339 units. Last year, builders started 287 single detached homes in the inner-city area.

 

The attraction to inner-city building is quite simple. Location.

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