Housing starts in the Calgary Census Metropolitan Area (CMA) increased 65 per cent for the month of June 2012 compared to June 2011.
“The gain in new construction was attributed to higher starts for both single-detached and multi-family units,” said a Housing Now report from the Canada Mortgage and Housing Corporation (CMHC).
The CMHC reported housing starts so far this year have nearly doubled from 3,530 in 2011 to 7,044 in 2012. Of single-detached starts in the Calgary CMA there was an 18 per cent increase in June 2012 totaling 531 units.
“Low mortgage rates, full-time employment gains, positive migration flows and a more balanced resales market have contributed to the demand for new homes,” said the CMHC report.
The CMHC stated in the second quarter of 2012, actual employment in Calgary increased 4.6 per cent compared to 2011 with an average of over 753,000 people employed. Across the province however, 8,600 jobs were lost after three consecutive months of gains according to ATB senior economist Todd Hirsch.
“The unemployment rate in the province ticked up one tenth of a percentage point to 4.6 per cent — still the lowest in the country,” he said. “While June’s job losses are disappointing, one month of data does not alter the overall picture of a healthy job market here. The average level of employment over the last 12 months is still higher by nearly 4 per cent compared to the average over the previous 12 months.”
Migration both into Calgary as well as Alberta is also continuing on a positive path. According to the Calgary Civic Census for 2012, net migration was 19,658 this past April compared to 9,563 in April 2011.
“In the first quarter of 2012, net migration in Alberta had more than doubled from the same quarter of 2011, reaching 22,067 migrants,” said the CMHC report. “This represents one of the strongest first-quarter performances on record.”
The migration into Calgary and Alberta is reflected both by the aforementioned housing starts as well as the resale and apartment markets.
According to the CMHC report, MLS® residential sales in Calgary totaled 8,534 units in the second quarter compared to 6,733 at the same time last year; the fifth consecutive quarter where sales have increased on a year-over-year basis.
“Apartment inventories have moved lower for three consecutive months reaching 299 units in June,” said the CMHC report. “This also represents a decline of 40 per cent from the previous year.”
Low apartment inventories are also being felt in the rental market. In July the CMHC reported the average apartment vacancy rate in the city was 2.5 per cent.
“A tight rental market results in less choice for renters and ultimately pushes up rental rates,” said CREB® economist Ann-Marie Lurie. “As rental rates rise, more people consider home ownership as the spread between ownership and rental narrows; this drives up the demand for housing.”