Calgary’s hot resale real estate market has many potential buyers looking for new homes as an alternative.
Local homebuilders such as Jayman BUILT expected a pause once the pandemic hit, but instead faced the opposite.
“(The request) was shocking,” Jayman’s vice president, Stephanie Myers, told Global News. “There is very little inventory of homes available on the market with any builder at this time. We see a record number of traffic in our show homes: more than 200 groups, week after week.
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“Sales velocity is at record highs,” she added.
Figures from Canada Mortgage and Housing Corporation (CMHC) show strong housing starts in Calgary compared to the rest of the province.
A total of 2,249 homes were started in Alberta in February, up from 1,854 in the same month last year. About half – 1,159 – were in Calgary. CMHC reported that 642 were started in the city during the same period in 2021.
The City of Calgary is also reporting an increase in the number of residential building permits. From January to the end of March, it received 1,441 permit applications against 1,230 in the same period last year, an increase of 17.2%.
Florin and Karen Marinescu, a couple from Calgary, bought their dream home in the fall of 2021 and took possession in August. They signed on the dotted line after looking around at older, already built homes.
“It was pretty clear to me that I didn’t want an old house,” Karen said. “I wanted to build a new house.”
When Global News asked the couple “Why buy new?” they replied that they liked being able to choose which features will be included in the home, including upgrades and energy-efficient features offered with Jayman.
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“I bought the house of the future – today,” Florin said.
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The Marinescus also appreciated the “cost savings” of buying new homes and are glad they didn’t wait for Calgary’s scorching resale real estate market to heat up more than it already has.
“We did the right thing. We made the right decision at the right time. »
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Myers agreed that with so many resale home bidding wars going on right now, that makes sense for some buyers.
“The cost comparison is pretty close,” she added. “There’s not a huge variation between new and resale right now and the benefit you have with buying a new home is the efficiency that goes into operating a new home. today compared to an older home.”
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However, the cost of new home construction has increased.
BILD Calgary Region, which represents the building and land development industries, said controlling costs poses many challenges.
“The main challenge is really threefold,” said CEO Brian Hahn.
Lumber prices have risen significantly, as have the cost of many other materials, including steel and engineered products. Add to that supply chain issues and labor shortages and he said it was a perfect storm.
“Commodity prices — some of them — have stabilized 100% higher than they were pre-COVID,” Hahn said. “Manufacturers must be able to cover their costs and their margins, it’s just a reality. So ultimately (prices) have to work their way into the cost of a house.
It’s something Jayman has seen first hand.
“We’ve seen increases of $25,000, $30,000, $40,000 month over month for the last little bit,” Myers said.
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Both Myers and Hahn said a lot of work is going on behind the scenes to find materials in Canada, even locally. They add that the industry also continues to innovate to try to keep prices affordable, but it’s not easy.
“Which comes down to making predictions,” Myers said. “We are constantly working with our trades and suppliers to ensure that everything has been secured in advance. Most builders here in Calgary, including ourselves, have sales caps in place so as not to oversell capacity.
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Hahn said Calgarians can take comfort in the fact that buying a home in our city is still doable.
“Our real estate prices here are the most affordable, or among the most affordable in the country,” he said. “And Calgary is a real place of value and that too is fueling some of the demand here.”
He said going forward it will be a real balancing act, with home buyers ultimately dictating what happens with the market.
The Marinescu are just happy it’s not their problem – not anymore.
“We are so excited,” they said. “We are both so excited. I mean if it can be built overnight, I’ll move in tomorrow – we can’t wait.
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