Row house construction up 37% in Calgary as builders and buyers seek more affordable options
CBC
Row house construction is surging in Calgary, as builders and buyers look for more affordable options amid a triple whammy of construction costs, interest rates and purchase prices all rising simultaneously in the city.
"We've seen a bit of a shift away in demand, at least temporarily, from the more expensive single-detached homes," said Taylor Pardy, a market analyst with the Canada Mortgage and Housing Corporation (CMHC).
"As a result, more demand has been shifted over to the multi-unit side."
The CMHC released its latest report on housing starts Thursday, which showed construction of single-family homes in Calgary and the surrounding area was down 13 per cent in the first half of 2023, while construction of row houses was was up 37 per cent compared to the same period last year.
Overall, the number of new units under construction is about the same as last year.
"The level of housing starts held steady in Calgary mainly because gains in row starts offset weakness in other categories," the report reads.
Apartment construction accounted for the largest chunk of new homes being built, with 3,506 units out of the total of 8,106 housing starts in the first half of the year.
That's about the same as last year.
The CMHC noted more than half of those units are purpose-built rental apartments, which is the first time Calgary has seen a majority of apartment-style units being built for rent rather than for purchase.
"This is encouraging news for purpose-built rental supply and affordability in Calgary," the report says.
The report also noted that increased construction costs remain a "major challenge" when it comes to building more homes.
"According to market intelligence gathered by CMHC, some developers are now having more difficulty financing existing projects because of higher construction costs and interest rates," the report reads.
The cost of building is up in all major cities, according to data from Statistics Canada, and Calgary's increase has been second only to Toronto's.
It costs about 77 per cent more to build a home in Calgary today than it did in 2017.
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