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about possible challenges of meeting the growing housing demand.

Calgary trailed only Toronto (21.9 per cent) and Edmonton (16 per cent) for increases in residential construction costs. The cost of materials and labour is also impacting construction timelines. The current guesstimate to build a multi-unit high rise building is 20 months, while the average detached suburban house takes eight months.

There are other beyond-builder-control factors, like affordability and mortgage rates.

“Affordability is impacting Calgary’s multi-unit, residential construction. Not only has the Calgary condo market been fairly slow over the past several years,” explains Cole Harris, president of the Centron Group of Companies, “demand has switched from condo purchasing to new high-rise apartment rentals. The combination of changing consumer demands and more stringent mortgage qualifying rules, as well as higher interest rates, high, downpayments and lack of flexibility, have been major contributors to the switch from condo purchasing to rental properties.

“Affordability is definitely a factor where units and buildings are getting more and more efficient, and larger scale projects are able to get the cost per unit down,” Harris points out.

Shane Wenzel also mentions that housing affordability is top of mind for consumers. “There was a sincere shock that the fed continually increased rates and rapidly. We witnessed a slowdown across the country but more of a market lull here in Calgary. Some buyers are still waiting to see if the rates will drop.

“And, while we strive to keep pricing as reasonable as possible, upward pressure from a lack of available land supply, materials and especially labour rate increases have forced pricing up again.”

Centron’s Cole Harris cautions about the ongoing impact of costs on Calgary residential construction. “The increasing cost environment is substantial and will limit the number of developers proceeding with new towers. Unfortunately, it will limit supply even further, while demand is increasing with the increasing Calgary and Alberta population from migration.”

With much experience, both as a builder and savvy about consume trends, Dave Hooge admits that price is always an important driver of residential construction and new home sales. “As consumers settle into rising interest rates, they are often forced to consider more affordable product than they had originally anticipated. This causes some delays in purchase decisions, as they either warm up to the idea of choosing a different home model or built form (a laned home instead of a front-attached garage home, for example), or even the decision to stay where they are.”

The construction cost crunch, hiked mortgage rates and affordability are also causing Calgary builders and developers to up their game, in many ways. Like amenities, new standards and innovation.

Cole highlights some new Centron projects, like the Oliver East and West apartment towers on 10th Ave., with the Luca restaurant and the Fleetwood lounge on the main floor, the Catalyst on 14th St., and Clearwater Park, Centron’s 580acre master-planned community in Chestermere.

“Whether it’s sustainability or adding smart home devices to our standard packages, we are continually looking for ways to provide more value,” Hooge says. “This year, Jayman BUILT introduced 10 standard solar panels on all single-family homes to help save up to 50 per cent on electricity bills and add sustainability.”

The best indicator of the positive construction momentum? Calgary builders, developers and construction sites are busy!