Now more than ever, new home builds are a unique juggle.
Traditionally, Calgary builders focus, plan and strategize. This time it’s about the Alberta economy, some subtle and common COVID disruptions like working-and-school-from-home have already altered lifestyles, affordability, the cost of raw materials – from lumber, concrete, copper plumbing and shingles – unpredictable consumer confidence and the shifting wants, needs, must-haves and consumer trends.
Calgary new home builders weathered the recent business ups and downs triggered by the pandemic. They are now innovatively adjusting to the new normal: a house is not just a home – it’s a flexible space. “The pandemic did have everyone rethinking their space,” explains Stephanie Myers, vice president with Calgary’s Jayman BUILT. “We all realized quickly that our homes could not adapt to become the home office, home school, entertainment and gym spaces that we now need them to be. There is a significant shift in what the consumer is looking for and builders are introducing new home designs to accommodate. It’s not just about needing more square footage. It’s how effectively the space is used.”
While strategizing for consumer trends has always been a vital factor for new home builders, the sudden and ongoing pandemic disruptions have fast-tracked the new home planning and building process. “Home features and designs are always being developed and implemented,” says Scott Janis, president of Alberta for Land and Housing Operations with Brookfield Properties. “Technology and environmental impacts are continuing to evolve and cause change in new homes. COVID has forced us to think differently, not only about our housing design but also in the value we deliver in Brookfield Master Planned Communities.
“Connectivity, greater consideration for work-live features and separate spaces for multiple family members to work are examples of emerging priorities in housing design. The past 18 months has had a large and potentially permanent impact on how we do business,” he points out. “Especially the relationship with our customers. We are set up to be more agile and flexible, open to engaging with our customers differently and through more varied channels. The pandemic forced a rapid acceleration of many areas that are changing how we work, interact and sell.”
Despite the positive of low mortgage rates and competition from Calgary’s unexpected hot resale market, the new home build sector has been dealing with some challenging negative speedbumps: the Alberta economy, tough federal mortgage rules, affordability, the lockdowns and a mid-year spike in the cost of building materials.
Stephanie Myers is upbeat that, according to Jayman BUILT stats, “2021 has been an incredibly active year, with permit counts exceeding 2019 by over 1,200 units in the first half.” She acknowledges the surprise of this summer’s booming resale market but adds that it didn’t really work out to competition for the new home sector.
“The activity on the resale market (MLS) has actually resulted in increased volume for new builds, primarily because there is such little product available on the used market. Resale selection is limited and moves quickly. The pricing on resale may be comparable to a new home, but resales require renovations and updates. With a new home, people choose to build exactly what they need.”
Many of Calgary’s new homes feature hardwood flooring, granite countertops, stainless-steel appliances, media rooms, ensuite bathrooms, in-floor heating and multi-car garages. Industry professionals point out that new houses also have the benefit of being more affordable over the long term than older homes, particularly the improved construction methods and materials, which make today’s new homes much more energy efficient than in the past.
COVID or no COVID, Scott Janis forecasts that on a new home volume basis, 2021 will likely wind up relatively consistent with 2018 and 2019 volumes. He also points out that two 2021 factors have impacted hew home builds. “Due to high demand for housing materials across North America, housing costs rose at record rates, peaking in summer. It resulted in a rapid increase in home prices which has had a cooling effect on the market. Supply challenges also slowed the construction schedule of many large projects and single-family homes. “Although housing demand and sales were far greater than the industry expected for the first part of the year, due to the federal CERB payments that constrained supply of labour, overall industry capacity was challenged.
“No matter what, affordability is still key,” he says. “Home builders are watching building input costs, financing costs and land development costs very closely. The Calgary new home market is driven in large part by employment, in-migration and affordability.
“Canada remains a highly sought-after destination globally,” Janis notes with enthusiasm. “And Alberta offers the best balance of affordability and opportunity in Canada. We need to continue to leverage these strengths as we rebuild and diversify our economy.”
The outlook for 2022 new home builds is encouraging.
“Calgary is going to continue to grow and change,” Myers says with positivity. “There is optimism now around our economy and opportunity to bring business back. Family and lifestyle became more evident during the pandemic. People are investing more – time and money – in those areas, and it starts with where you live. It starts at home.”