Last year brought about several positive economic milestones for Alberta as the province’s new multi-family home sector experienced growing levels of starts and sales.
A new Alberta State of the Market report released by Zonda Urban for Q4-2021 shows that 2021 was a year of recovery for Alberta’s economy while both new multi-family home sales and prices grew in the province’s two major cities.
“Improving economic conditions have had a positive effect on the new multi-family home market
throughout the year,” said the report. “Yearly sales totals in both Edmonton and Calgary increased in 2021.”
According to Zonda Urban, Alberta reported a 5.9 per cent increase in annual economic growth in 2021, and recorded $561 million in total venture capital investment by the end of the year, surpassing $450 million in investment by September. The province’s many solar projects have attracted international investment and job creation, while Alberta produced a record 1.32 billion barrels of oil in 2021 as global demand strengthened. Unemployment rates dropped in Calgary and Edmonton during Q4-2021 as the population growth rate in both cities returned to pre-pandemic levels.
As multi-family housing starts and building permit values trended upward in 2021, Alberta experienced a positive net migration gain of 16,690 people, the highest amount since 2014.
“Positive net migration totals in Alberta are expected to continue as other major housing markets in Canada become more expensive,” said the report.
Housing starts increase in Calgary and Edmonton
In Alberta’s biggest cities, housing starts were on an upward trend last quarter.
From Q3-2021 to Q4-2021, Calgary’s total housing starts increased 37 per cent and were up 14 per cent in Edmonton. Most starts were for apartment units, totaling 2,280 starts in Calgary and 1,411 starts in Edmonton last quarter.
Total housing starts across all sectors equaled 11,688 Calgary starts and 9,039 Edmonton starts in 2021, up 26 per cent quarterly and 21 per cent yearly between both cities.
On a yearly basis, building permit values have also increased.
Total Alberta residential building permit values dropped five per cent from Q3-2021 to Q4-2021, but increased 39 per cent on a yearly basis. Calgary and Edmonton accounted for 83 per cent of the province’s building permit values last quarter.
The total residential housing investment for Q4-2021 in Alberta equaled $3.17 billion, 27 per cent lower than Q3-2021.
Buyers snap up new townhomes in 2021
New townhomes in Calgary and Edmonton had a good year for sales in 2021.
In 2021, Calgary logged 3,505 new home sales, a 25 per cent increase from 2020 and the highest yearly total since 2014. Townhomes accounted for 1,842 sales in 2021, the highest recorded total since Zonda Urban began tracking the market, said the report. On a quarterly basis, total sales fell nine per cent compared to Q3-2021 but increased 13 per cent from 2021.
For all housing types, the average price per square foot and the average unit price for a new home in Calgary increased 1.8 per cent quarterly. In Q4-2021, it cost $669 PSF for a new concrete condo, $375 PSF for a wood frame condo and $272 PSF for a townhome.
In Edmonton, there was a total of 1,297 sales in 2021, up 20 per cent from 2020. There were 991 townhomes sold last year, the highest recorded total since Zonda Urban began tracking this metric. Edmonton’s total released and unsold inventory levels dropped ten per cent from Q3-2021, and are 47 per cent lower on a yearly basis.
The average unit price for all Edmonton product types jumped 1.6 per cent from Q3-2021 to Q4-2021. Wood frame condos were the only housing type to record a decrease in price, falling 0.96 per cent in price and 0.21 per cent per square foot quarter-to-quarter.
In Q4-2021, 11 new multi-family projects kicked off in Calgary and none were launched in Edmonton.
New rental units hit market, and more are coming
For new purpose-built rentals, the weighted average net rent per square foot in Calgary — when excluding Airdrie and Cochrane — is $2.22, three per cent less than Q3-2021. Last quarter, the most expensive average net rent per square foot was in Inner North, where newer rentals cost $2.51 PSF.
Released and available units increased 33 per cent (388 units) quarter-over-quarter in Calgary. The downtown neighbourhood reported the highest number of released and available units in Q4-2021, with rental 767 suites.
Edmonton’s weighted average net rent per square foot was slightly less than Calgary, averaging $1.74 in Q4-2021. The priciest average monthly per square foot rents were found in Edmonton’s downtown at $2.02.
There are 1,923 released and available purpose-built rental units in Edmonton at the moment, an 11 per cent decrease from Q3-2021 but one per cent higher than Q4-2020.
Seven new purpose-built projects are anticipated to launch in both Calgary and Edmonton within the next six months for a total of 2,205 homes between the two cities.
