Profile Spring 2014

SPRING 2014 VOLUME 21 • ISSUE 9

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content s CANADIAN HOME BUILDERS’ ASSOCIATION – CALGARY REGION represents professionals in the housing industry. CHBA – Calgary Region has been in existence for over 60 years and is a network of professionals that manages industry issues to provide value to our members.

100-7326 10 St. N.E., Calgary, AB, T2E 8W1 Tel: 403.235.1911; Fax: 403.248.1272 E-mail: info@chbacalgary.com Website: www.chbacalgary.com Donna K. Moore | Chief Executive Officer donna@chbacalgary.com Val Veldhuyzen | Director, Finance and Administration val@chbacalgary.com Amie Blanchette | Director, Government Affairs amie@chbacalgary.com David Bears | Director, Programs david@chbacalgary.com Kathy McCormick | Profile Editor, Director, Communications kathy@chbacalgary.com Habiba Gulnaz-Khalid | Accounting Co-ordinator habi@chbacalgary.com Kailey Mitchell | Event Co-ordinator kailey@chbacalgary.com Deanna McArthur | Communications Assistant deanna@chbacalgary.com Susan Fordyce | Executive Assistant susan@chbacalgary.com

Spring 2014 • VOLUME 21 • ISSUE 9

A SSOCIATION INFORMATION 7 Message from the President, CHBA – Calgary Region 8 Message from the CEO, CHBA – Calgary Region 9 Message from the President, CHBA – Alberta 10 Advocacy Roadmap 2014 14 Corporate Sponsors 15 Events Calendar 23 New and Cancelled Members

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INDUSTRY E VENTS 11 What a show!

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A SSOCIATION E VENTS 12 Get connected FE ATURES 16 Echo boom making noise 18 Good vibrations 20 Judgement call INDUSTRY NEWS 25 Going green with GEEP 26 Service with a smile 27 Understanding the 55+ market 29 Change for the better

Cover photo by Don Molyneaux

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12 Published by Source Media Group Corp.

207, 5809 Macleod Trail S.W., Calgary, AB T2H 0J9. Tel 403.532.3101, Toll free 1.888.932.3101 Fax 403.532.3109 email: info@sourcemediagroup.ca web: www.sourcemediagroup.ca Associate Publisher | Jim Zang Art Director | Jean Faye Rodriguez Graphic DesignerS | Lama Azhari, Dave Macaulay, Megan Sereda Production Co-ordinator | Colleen Leier Accounting | Donna Roberts Advertising Sales | Janice Skelton-White janice.skelton-white@sourcemediagroup.ca © 2014 Source Media Group Corp. Material cannot be reprinted in whole or in part without the expressed written permission of the publishers. Source Media Group agrees to advertise on behalf of the advertiser without responsibility for claims or misinformation made by the advertiser and acts only as an advertising medium. Source Media Group reserves the right to refuse any advertising at its sole discretion.

Profile is published quarterly per annum and is distributed to every member of the Canadian Home Builers’ Association – Calgary Region.

We’d love to hear from you…

Letters to the editor, article suggestions, columns, topics and opinions are all welcome and encouraged! Please nail us a notice, saw us a yarn, measure us a metre of your thoughts. We’ll print the best ones in the next issue.

Contact Kathy McCormick, Director, Communications at 403.730.4255 or kathy@chbacalgary.com

!

Need to change your contact name or address?

Let us know at info@chbacalgary.com

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President ’s message | association information

By Douglas Whitney

President, Canadian Home Buiders’ Association – Calgary Region

We built this city Welcome to the new year. Although it has barely begun, all indications are that it is going to be a better year than last — and, we hope, without any major catastrophes such as the devastating flood of 2013.

I’d like to take a few minutes of your time to talk about our Association and its roots. Especially if you are a newcomer to the CHBA – Calgary Region, it doesn’t take long to realize the importance of our industry — and the part our Association plays in that success.

It was founded in 1946 by a group of builders who, not surprisingly, had many of the same goals our industry has today — to build safe, affordable and comfortable homes for the burgeoning population. It was just after the war and the soldiers were returning home with their new brides and hopes of a better life filled with children and abundant opportunities. And they all wanted new homes.

In true Alberta fashion, the provincial housing minister at the time, A.J. Hook, wasn’t too happy to find the federal government delving into the business of subsidized housing. “Row after row of similar houses creates a drab effect. We in Alberta like individuality,” he said.

If you take any time to travel the neighbourhoods in our vibrant city, you’ll see just how creative and entrepreneurial those early builders were — with unique homes built around lifestyle amenities to satisfy any homebuyer of the day. Many of those giant builders are still in evidence today, creating living legacies for people in every area of the city and beyond. And that

creativity lives on in the suburbs all over the city today.

Then came the many builders who fought to survive during the devastating bust in the early 1980s when the National Energy Program stopped the economy of Alberta in its tracks, the housing industry as one of the first casualties. Many of our largest homebuilding companies started then and built their way up to the success they have today.

Resilient, resourceful, entrepreneurial, and creative.

It is an industry to be proud of — a dedicated group of builders, suppliers, trades, renovators, manufacturers, and related businesses that account for $5.7 billion in investment value to our city every year (2012 statistics...it is even more today). The industry — a key economic engine of this city, this province and this country — employs more than 37,200 people in Calgary alone.

And we are proud to say, we have a voice

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— a unified voice — that is heard. Our Association is that voice. We are valued stakeholders at the table when changes are made, new regulations are proposed, new materials, new ideas and new ways of doing business are addressed.

Without the 640-plus member companies in our organization — and the many volunteers who dedicate their valuable time and expertise in the many areas of new home construction — our industry would not be as strong; our city would not be as vibrant.

We have achieved many successes over the past 68 years — but much more work is to be done. This is a time of change — far-reaching changes that will affect the way you do business — and with your continued support, we will represent you every step of the way.

If you haven’t yet done so, read more of our history in our book, A Roof Over Our Heads.

ceo’s message | association information

By Donna Moore

CEO, Canadian Home Buiders’ Association – Calgary Region

Exciting new plans for HomExpo 2015 Did you know that we have been providing a valued service to not only our members, but to the general public through our HomExpo home, renovation and décor show for 47 successful years?

It is the first show of its kind in the year, so people who have renovations, remodelling, updating, or buying new on their New Year Resolution list can’t wait to get started.

I’m excited to announce a whole new regime, starting next year, which will allow us more flexibility and the opportunity to change the show in progressive ways that will be of benefit to everyone. The CHBA – Calgary Region team will be show management, where we had previously contracted it out. In fact, for the last 26 years, Rick Young of Young Marketing Services has successfully produced our show and I want to say a huge thanks to him for his professionalism and dedication in building a strong brand and top-notch shows each year that have contributed to our financially-sound Association. I wish Rick all the very best in future.

As many of you are aware, over the past few months, we have had Laurina Milne contact many of you about involving your company in HomExpo and we have gathered valuable feedback on our show — some of which we hope we will be able to

incorporate in the future.

Over the next few months, we’ll be working on our new concepts for HomExpo and we’re pleased to announce a new location for next year — more details to come as we prepare for 2015.

Meanwhile, I thought it might be of interest to you to know that our HomExpo show is our major fundraiser of the year, allowing us to provide the many services, information and activities that we have.

Did you know that last year, we provided 17 educational opportunities (such as Builder Breakfasts, a sales rally, Dinner Meetings with keynote experts speaking on topics of interest to the residential construction industry, and more)?

Did you know we spend a whole year preparing for our biggest event to celebrate our industry, the annual SAM Awards Gala that attracts upward of 1,600 people?

Did you know our most popular event,

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the annual Fairmont Golf Tournament, has been a success for 27 fun-filled years?

Even more importantly, the HomExpo show allows us to provide continuous support and a voice at the table at all levels of government on areas that affect your business...and without that ability, the implications of some of the changes through government policy would be made without knowing the impact (good or bad) these would have on our industry. We are the voice of the industry — and we do believe that is our most important role.

And of course, the other important part of HomExpo is the value of the show itself to not only our members, but the general public, who can obtain professional advice from respected members of our Association and who can find out the steps to successful renovation through our RenoMark™ program.

All in all, we believe HomExpo is a win: win for our members and the general public. We hope you will be as excited as we are to be part of this venture as we roll out our changes for 2015.

CHBA – alberta | association information

By Stephen Amonson

President, Canadian Home Builders’ Association – Alberta

A look at Alberta in 2014 Alberta’s economic engine continues to gain speed, fueled by energy sector investments that are cranking out new jobs and drawing thousands of people to the province to fill them. Population pressures are pushing home prices higher and vacancy rates lower.

No surprise then that most economists expect residential construction will accelerate in 2014 when GDP growth will lead the nation.

Here are snapshots of what’s happening in Alberta this year and initiatives that are high on the agenda for CHBA – Alberta.

Economy Booms RBC Economics describes the province as “an economy in the midst of a boom” — with better times still ahead. GDP is expected to rise to 3.9 per cent in 2014 and be tops in Canada through 2015. Housing starts in 2013 neared 35,000 units, up about five per cent and the best total since 2007. CMHC is predicting a moderate uptick in starts for 2014 as builders benefit from surging employment (78,000 new jobs through the first 10 months of 2013) and population growth rates not seen since 1982. The strength of the market is also evident in strong gains posted by real estate boards in Edmonton and Calgary and rock-bottom apartment vacancy rates.

Even the devastating floods that roared through southern Alberta last June did not erode the province’s solid economic foundations. Damages are pegged at $6 billion and the impact on the residential sector was highlighted by recent news that flood damages chopped more than $400 million from the assessed value of some 2,000 homes in Calgary.

New Warranty Rules Top of mind for many Alberta builders and renovators is the launch of mandatory new home warranty coverage under the province’s New Home Buyer Protection Act effective Feb. 1. Information sessions organized by CHBA – Alberta in six cities attracted almost 800 people eager to get a head start on preparation for the new program. Alberta builders are proud to have introduced the first voluntary home warranty back in 1974 and support the move to extend this important consumer protection so it covers all buyers. Also high on the legislative agenda for CHBA

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nty arra n w e o Mor ormati 9 f in age 2 on p

– Alberta are reviews of the Condominium Property Act and Municipal Government Act. The condo legislation changes are likely to be introduced this spring.

Safety First In 2014 CHBA Edmonton and Calgary are poised to implement the first phase of the CHBA – Alberta Safety Initiative by bringing most of their large builder members on board with COR or SECOR. This year, CHBA – Alberta will also work with Central Alberta, Grande Prairie and Medicine Hat locals on the Safety Initiative. Lethbridge is leading other areas of the province in regard to COR and SECOR. Also in the year ahead, the Alberta housing industry will see the impact of ticketing and administrative penalties on workers, employers and prime contractors.

CHBA – Alberta will also monitor the OH&S Residential Initiative. The initiative has three parts — spot inspections, identification of high-risk employers with the new scorecard approach, and utilizing the OH&S data base to identify contractors or prime contractors with ongoing compliance issues.

CHBA – C algary Region | association information

By Amie Blanchette

Director, Government Affairs, CHBA – Calgary Region Project Manager, VoteCalgary

Advocacy Roadmap 2014 Progress being made on several key Government Relations initiatives January is always a good time to think about a fresh start and consider the opportunities before us.

While I will have likely given up on my personal resolutions by the time you read this, I’d like to think our Government Relations activities are much more focused and most importantly, achievable.

We are calling the infographic presented here our “CHBA – Calgary Region Advocacy Roadmap”. It explores a variety of topics and concerns you have brought to us over the past few years. We feel the time is right to start making real progress on these issues. I would encourage you to read this information and provide your feedback. Is there a certain issue here that resonates for you? Do you have experience or expertise to share? Is there an item you would specifically like to be involved with? Drop me a line at amie@chbacalgary.com and let me know.

As always, we welcome your participation in our Government Relations initiatives and encourage you to get involved. And please refer to our website, www.chbacalgary.com and the Government Relations Report, where we have updates on our advocacy work and which is frequently updated with news on areas of interest to our industry.

How do we create more choice for more people in more places?

Increased affordability can be achieved by removing costly barriers PARKING

SUPPLY

REGULATION

RENTAL REFORM

More Stalls = Increased $$$

Options Limited = Increased $$$

Time to Market = Increased $$$

Tax Structure = Less Units

1. Allow for increased Tandem Parking

1. Comprehensive Secondary Suites policy

1. Reduce circulation times

2. Revise minimum parking requirements for some uses/areas

2. More permitted uses for Ground Oriented Multifamily units in both new & established areas

1. Create new Property Tax Class for purpose built rental

3. Consider other solutions like pooled parking, securing off site stalls, exemptions for adaptive reuse for residential/ rental

3. Ensure new serviced land supply chain is smooth

2.Move all businesses on-line 3.Eliminate unnecessary requirements prior to decision 4. Create a more streamlined process for desired building forms and/or proven builders

2. Lobby for GST reform on newly constructed rental property 3. Incentives for adaptive reuse for new rental inventory

DID YOU KNOW…?

In Toronto, it is estimated that as high as 80% of rental households live in condo apartments. In other words, private condo units held by investors have become the new rental stock.

In the U.S. the average cost to construct ONE stall in a parking structure is $15,000 (it only increases from there based on number of levels and ground conditions). In fact, on average, most spots cost more than the cars parked in them!

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HOME XPO | INDUSTRY EVENTS

What a show!

Another successful HomExpo goes into the books Scott McGillivray

The Canadian Home Builders’ Association – Calgary Region’s 47th annual HomExpo home renovation and décor show was in January. The three day show, which was the first of the season, showcased over 130 exhibitors from all facets of the home building industry.

Attendees to the show were able to talk with renovator and supplier members, as well as a variety of different experts in a wide array of businesses related to home building and renovating. The opportunity to discuss individual projects one-on-one with the experts was a prime motivator for the show-goers and a key reason for the success of this year’s HomExpo.

The Destination Renovation RenoMark™ booth was one of the most popular spots for those looking for reliable, professional advice and contacts — and it was an opportunity for us to showcase our members and the professional RenoMark™ program. Volunteers at the booth were able

to provide people with information on the importance of dealing with professionals from the program, tips on hiring a contractor and the steps involved in a renovation.

Since the show is designed to showcase the CHBA – Calgary Region members for the general public who attend — many of whom are interested in renovations or updating their homes — one of the most valued HomExpo giveaways was the contact list of all of our members. This, as well as a reusable HomExpo bag, was given away to all who walked through the BMO Centre doors.

And of course having the star of HGTV’s Income Property, Scott McGillivray, as a guest speaker brought in crowds,

Contributed by Deanna McArthur, Communications Assistant, CHBA – Calgary Region

Crowd at HomExpo 2014

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too — and they weren’t disappointed.

An impressive crowd turned out to hear McGillivray’s top five list of renovations to add value to a home. Every seat was full, and a crowd even gathered wherever there was standing room so as to not miss the valuable renovation tips.

Number one on McGillivray’s list was Income Suites, a hot button topic that has recently come into the spotlight in Calgary.

McGillivray’s full list of renovations that add value to a property, in order of return: 1. Income Suites 2. Kitchens 3. Bathrooms 4. Fixtures 5. Flooring Thank-you to all the volunteers who helped make the HomExpo a success.

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association Events

Get connected

Industry events: an opportunity to network with peers

Holiday Mix & Mingle The highlight of the festive season, our December Holiday Mix & Mingle, was held at the Coast Plaza Hotel on December 4. Guests enjoyed great live music, an open bar, a selection of appetizers, and most importantly, the opportunity to network with other industry associates. Thanks to our generous sponsors of this event; Birchwood & Shane Homes.

Thank-You sponsors!

Thank-You sponsor!

December Builder Breakfast At our extended Builder Breakfast on Tuesday, December 3, attendees learned about the new Alberta New Home Buyer Protection Act or Bill 5, which requires mandatory warranty protection for every home, condo unit and major renovation as of February 1, 2014. Speakers from CHBA – Alberta and Government of Alberta Municipal Affairs explained the details of the coverage and the permit process under this new legislation and City of Calgary officials shared the changes needed locally. Thanks to El Dupont/ Tyvek for sponsoring this event! See page 29. profile

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association Events

Thank-You sponsor!

Economic Forecast Meeting Close to 600 members attended the annual Economic Forecast dinner meeting on January 15. Don R. Campbell, founder of the Real Estate Investment Network (REIN™) which analyzes markets across Canada, and Richard Cho, senior market analyst with the Calgary branch of CMHC, were keynote speakers. Members were provided with updated information on the year-end statistics and an analysis and forecast for 2014. See pages 16 and 18. Special thanks to ATCO Gas for sponsoring the biggest dinner meeting of the year.

Children’s Christmas Party Our Children’s Christmas Party on December 15 was a great success. Over 80 children and their families came out to enjoy the afternoon with food, face painting, crafts, and gifts straight from Santa himself. We could not have done it without the support of our sponsors; Canyon Plumbing & Heating, Great Canadian Roofing & Siding, Heritage Pointe Golf Club, Rheem represented by Stringer Sales, Stepper Custom Homes, Timber Tech Truss, Westridge Cabinets, and Wolseley Canada.

Thank-You sponsors!

,1&

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A ssociation information | 2013-2014 Corpor ate sponsors

Thank-you corporate sponsors 2013-2014

Thank-you sponsors!

A special thank-you goes out to our corporate sponsors for their ongoing support and contribution to the Association, which allows CHBA – Calgary Region to provide valuable information sessions, events and networking opportunities and, even more importantly, allows us to continue the valuable advocacy work on issues impacting our members.

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Events C ALENDAR FEBRUARY 2014*

27

Builder Breakfast Glenmore Inn

MARCH 2014*

5

Young Guns Mentorship Luncheon, Hotel Blackfoot

12

Luncheon Meeting Coast Plaza Hotel (in place of regular dinner meeting)

27

Builder Breakfast Glenmore Inn

29

SAM Awards Gala Telus Convention Centre

APRIL 2014*

16

Dinner Meeting Sales Rally (Potential)

24

Builder Breakfast Glenmore Inn

MAY 2014*

10

RenoMark™ Renovation & CHBA – Calgary Region Infill Tour

14

Dinner Meeting Student House Awards Coast Plaza Hotel

For more information visit www.chbacalgary.com *Subject to change profile

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cover feature

Echo boom making noise Generation Y is a powerful engine revving up: are you ready?

If you are a baby boomer, this might sound familiar: you moved out of your parents’ home as soon as you graduated from high school; you lived in a place you rented — maybe even a ‘room’ in a larger house, where you shared the bathroom with the other tenants; you could put all your belongings in one small bag; and you saved up to buy a car.

That was the ideal lifestyle of the largest demographic ever to populate the world. It’s estimated that 9.6 million Baby Boomers are in Canada today and they are rapidly becoming the senior population — a population whose living conditions are far different today.

But did you know that there is another demographic as big as — if not even bigger than — the Boomers? That would be the Millennials, the Gen Ys or the Echo Boomers, whose name is not the only confusing thing about them. This group has not been clearly defined, nor is there a standard criterion for categorizing them.

They are born anywhere from the early 1980s to the early 2000s, depending on who is defining them.

At any rate, this age cohort has as many as seven million to 9.1 million people living in Canada — a huge demographic which has almost as much influence on trends as the Boomers have had since they were born.

And many of them are in Calgary. The median age of people living in our city is 36.4, according to Statistics Canada’s latest census numbers — the youngest

demographic in Canada.

“This city is younger, so are you targeting your marketing to this younger buyer?” researcher Don R. Campbell asked close to 600 CHBA – Calgary Region members at the annual Economic Forecast Dinner meeting in January.

And with our in-migration at an expected record 30,000 last year, many more are coming for the jobs offered by our buoyant economy.

That, the founding partner of the Real Estate Investment Network (REIN™) and Cutting Edge Research Inc. said, will have a profound effect on the housing market in Calgary in the near future.

“There is a dramatic technical shift happening in the real estate cycle here — and builders need to prepare now for what

is beginning to happen, but won’t hit until 2015 or 2016,” Campbell said.

That shift is occurring because of the Millennials who, said Campbell, have different ideals, different values, different priorities, and different ways of living than past generations.

Things really hadn’t changed much before this generation was born. People have had the ‘little white house with the picket fence and dog in the yard’ as their ideal dream of homeownership for decades — but other influences have changed much of that perception of that first home for today’s youth, said Campbell.

“If people build solely on what has worked in the last 10-20 years, they will struggle.

The Millennials want something different.”

The peak population growth for this cohort is now at age 22 and with the ample jobs in Calgary and the higher-thanaverage incomes offered here, those who are moving here for jobs and renting will be looking to buy at around age 31, he said.

“That’s especially relevant because of the rental shortage and high rental rates here.”

Here are some reasons why these young people are looking at a different lifestyle choice:

People have had the ‘little white house with the picket fence and dog in the yard’ as their ideal dream of homeownership for decades — but other influences have changed much of that perception of that first home for today’s youth.

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COVER FEATURE

The ‘barnacles and boomerangs’ Unlike the Boomers who moved out at age 18, the Echo Boomers are hanging on, living at home much longer or coming back once they have moved out. “They are staying home and want to buy, not rent, a home. Affordability is an issue, even with the high incomes.”

Location is a factor Again, unlike the Boomers, who have adjusted to long commutes to more affordably-priced homes in the suburbs, the Gen Ys will sacrifice size of homes for smaller apartments and condos closer to work to have more quality time after hours.

“Calgary has a ‘C’ rating for transportation now,” he said. “The average commute in Calgary is 67 minutes.”

The desire for ‘villaging’ This cohort wants to spend time walking to ‘socializing’ spots, restaurants, coffee shops, entertainment venues, parks, and recreation. They want variety and uniqueness in their own neighbourhoods.

Fewer cars More and more of these young people are not driving cars so they want to live near transit or C-Train stations or, even better, close enough to walk to work.

Good stuff They are used to living in their parents’ homes, so they are used to ‘nicer’ things — not starting out with the cement-blockand-plank bookcases the Boomers first had.

“They want nice countertops” They will soon be able to have the choice of any job they want because of the job shortage when the Boomers retire, so they want new, nice and practical.

The first house they buy may, indeed, be a condo, either apartment or townhouse.

But don’t be fooled into thinking the tiny, one-bedroom unit is the best choice for this demographic because of price point, said Campbell. “These will be the ghettos

The first house they buy may, indeed, be a condo, either apartment or townhouse. But don’t be fooled into thinking the tiny, one-bedroom unit is the best choice for this demographic because of price point.

10 years down the road. No-one will want them. Even when they buy, they’ll want two bedrooms to share costs with friends or tenants. Even three bedrooms to have one for an office.”

And no surprise, of course the homes must all be tech savvy — with all the latest to attract, and keep, this generation happy.

Campbell’s comments resonate with Price Waterhouse Coopers latest survey — Emerging Trends in Real Estate 2014.

Here is part of the report that, although it deals more with commercial real estate, shows the importance of this Don R. Campbell demographic group.

Coopers’ report on Calgary, and it’s a “The growth of Generation Y and winning combination for those astute its impact on all sectors of commercial enough to take advantage of the real estate could be the singular most opportunities now before the real shift dominant trend for many years,” says happens, said Campbell. the report. “This group lives, works and “For the second year in a row, Calgary plays in different ways than previous is the #1-rated market by survey generations. The impact will be felt by respondents,” says the report. “Calgary all real estate sectors. This generation marches to a different drum. It’s tied to will be more urban and less suburban; energy, so it keeps on building,” explains they won’t want to drive as much but will an interviewee. Holding the top spot for want to be mobile. From in-town rental both investment and development, Calgary housing to collaborative office space, to moves into first place for homebuilding as close-in warehousing to ensure same-day well.” delivery from online retailers, Gen Y will “The cycle is changing, and it kicks in in be a noticeable force shaping commercial late 2015 and 2016, so you can be ahead of real estate. All of these trends will have the trend,” Campbell said. significant impact on real estate. Referred Are you ready? to as a ‘powerful engine’ by one investor, this generation will be ‘very good for real estate.’”

Contributed by Kathy McCormick, Director, Top that off with the Price Waterhouse Communications, CHBA – Calgary Region

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cover feature

Good vibrations Net migration, job growth leads to positive outlook for 2014 2014 for the most part is expected to pick up where 2013 left off, the senior market analyst for Canada Mortgage and Housing Corporation said.

Many of the factors that are very important for housing demand are going to continue to gain momentum this year, but will not be as strong as 2013, Richard Cho told close to 600 members of Canadian Home Builders Association – Calgary Region at its annual Economic Forecast Dinner meeting in January.

“Housing activity really picked up in 2013 and part of that has been due to factors such as net migration, job growth and rising wages,” said Cho. “Although 2014 isn’t going to see the numbers we saw in 2013, improvements are still going to be quite positive.”

CMHC reported 6,402 single-family starts in 2013, up about seven per cent from 2012, and is expecting that number to climb to 6,500 in 2014. On the multifamily side, 2013 saw 6,182 starts, a

Richard Cho Photo by Don Molyneaux

Calgary CMA Annual Housing Stats

decline of about 11 per cent, but that number should level off again in 2014 to 6,600, a six per cent increase, Cho said.

The biggest decline on the multi-family side last year was in apartment starts.

In 2012 apartments reached the second highest level in 30 years, so although the numbers are down, units are moving towards historical norms, said Cho. And with inventory numbers down and the number of active resale listings down, CMHC sees opportunity for more multifamily construction in 2014.

Net migration rebounded quite strongly in 2012, breaking records. Calgary saw a net gain above every province and every territory in the country, showing that Calgary was the place to be.

And this held true in 2013, said Cho. While numbers are not yet released, projections are for Calgary’s net migration to be in the range of 30,000 — a record that CMHC expects to taper to 23,000 this year.

“Our labour market has outperformed many other places in the country, and that

Calgary CMA Single-detatched Absorbed Price

20,000

$600,000

18,000 16,000

$500,000

14,000 12,000

$400,000

10,000

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* Forecast, Source: CMHC

2013*

2014*

2011

2012

2009 2010

2007

Total

2008

$0

2005 2006

2013

2012

2011

2009

2010

2008

2006

2007

Multi Family

$100,000 2003 2004

Single Family

2005

2004

2003

2001

2002

2000

2,000

$200,000

2001 2002

4,000

2000

6,000

0

$300,000

Source: CHBA – Alberta

8,000

COVER FEATURE

to total 30,000, up from 29,954 in 2013.

The average price of all residential MLS sales is forecast to rise from $437,036 in 2013 to $447,000.

With high levels of net in migration in 2013 and the flooding which displaced many people in June, the rental market saw high levels of activity and the vacancy rate came in at about one per cent, a downward trend that we have been seeing since 2009.

“Vacancy rates in 2014 are forecast to rise to about 1.2 per cent as net migration levels off and more people move into new home ownership,” said Cho. For more information on what to expect in 2014 look for the story on Don R. Campbell, founding partner of the Real Estate Investment Network (REIN™) and keynote speaker at the Economic Forecast Dinner meeting, on page 16.

It’s history With 2013 now in the history books, many different year-end statistics help the experts formulate predictions for the coming year, spot trends and make ‘educated guesses’ as to how 2014 will unfold.

Barring any surprises out of our control, by all accounts, the momentum seems to be building, especially for Calgary and Alberta into the future.

Below is a sample of some of the year-end statistics.

And for the record, here is Canadian Home Builders’ Association – Calgary Region forecast for 2014, based on a survey of our Economic Advisory Committee members.

Contributed by Deanna McArthur, Communications Assistant, CHBA – Calgary Region

2014 SINGLE FAMILY STARTS: 6,562

“Housing activity really picked up in 2013 and part of that has been due to factors such as net migration, job growth and rising wages. Although 2014 isn’t going to see the numbers we saw in 2013, improvements are still going to be quite positive.”

Source: CREB

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$0

2012 Single Family

$598,000

$100,000

2013

2011

2012

2009

2010

2008

2007

2005

2006

2003

2004

2002

2000

2001

$100,000

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2013*

2014* MLS Average Price Total

* Forecast, Source: CMHC

$200,000

$200,000

$447,000

$300,000

$300,000

$437,036

$400,000

$400,000

$412,315

$500,000

$580,135

$600,000

$500,000

$0

TOTAL 2014 STARTS: 12,648

Calgary CMA Average Home Prices

Average Yearly MLS Sale Price for Single Family Homes in Calgary

$600,000

2014 MULTI-FAMILY STARTS: 6,086

$583,000

certainly draws people to Calgary,” said Cho. “But as other places in the country begin to see improvements, we are going to see net migration in Calgary moderate.”

Prices have been increasing in the new home market, with the New Housing Price Index on pace to rise over five per cent in 2013 and Statistics Canada expects that to go up another three per cent in 2014.

This increase in price can be attributed to a higher demand for materials as well as the lower unemployment rate, which puts pressure on employers to offer higher wages to keep people on the job.

“We are seeing more demand for materials because there are more homes under construction,” said Cho. “Not only in Canada, but the United States is starting to see an improvement in their housing activity as well. This all contributes to the cost of materials.”

The resale market is expected to see some slight increases in 2014, both in total sales and average price. Total residential MLS sales in the Calgary CMA are forecast

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Judgement call Is the economic glass half full or half empty?

It’s a conundrum.

Is Canada/Alberta/ Calgary poised to have a great 2014, or should we hunker down and put our money in socks buried in the backyard — if we, indeed, even have a backyard?

Who do you believe? The experts all have different opinions — but that’s what makes life interesting.

Take all that you see, all that you hear, and all that you think and mull it over to come up with your own conclusions. Then live with the consequences — or adapt as things change, as they always will.

It’s all about perspective.

Here’s a look at some of the news stories that have appeared across Canada at the end of 2013 and into 2014, with experts in the many related fields either saying Canada’s — Alberta’s — Calgary’s glass is half full or half empty when it comes to the economy and, in particular, the homebuilding industry.

See what you think. In fact, we’d love to hear from you and see if you agree or not with these predictions for 2014. Just send us an email to info@chbacalgary.com and give us your insight.

Contributed by Kathy McCormick, Director, Communications CHBA – Calgary Region profile

LOCAL: Calgary Sun, December 28, 2014: Industry looks back at ‘year of change’ “We saw the fulfillment of some things we were concerned about in terms of a tightening land supply. We were concerned that we would see our land supply tightening up in certain sectors and that is what is happening.

“It was also a year of opportunity for home builders with strong migration in Calgary and the region and, for most builders, it has been a pretty good year.” – Doug Whitney, president of CHBA – Calgary Region.

Calgary Herald, January 3, 2014: Supply of land ‘fly in ointment’ “I know that we’ve had this bandied about for a long time, whether there’s adequate supply of lots available to us. Frankly, I think unless we get this going, we’re facing some struggles. And I would suggest that this won’t necessarily happen in 2014, but it could come sooner than people think, like 2015 or 2016.” – Glynn Hendry, regional vice-president southern Alberta for Qualico.

Calgary Herald, January 3, 2014: Construction to flex muscles “Low rental vacancies, record migration inflows and rising prices in the (single-family home) market will increase the demand for multifamily units.

“As well, lower inventory levels for multi-family units, specifically for apartment units, will prompt more multi-family construction next year.”

– Felicia Mutheardy, market analyst, CMHC. Vancouver Sun, January 4, 2014: Calgary real estate market to leave Vancouver in the dust “The recently released report, by PricewaterhouseCoopers and the Urban Land Institute, examines real estate investment, development and home building in nine major urban centres across North America.

“Emerging Trends in Real Estate 2014 identifies Calgary in Canada, and San Francisco in the U.S., as the hottest markets in their respective countries.”

(See more on this report on page 22 in the Calgary Sun article: 2014 likely to mark year of urbanism)

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CBC News, January 6, 2014: Real estate boom continues in Canada’s largest cities “Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth.”

– Ann-Marie Lurie, chief economist for the Calgary Real Estate Board.

Calgary Herald, December 20, 2013: Canada’s housing market will likely simmer in 2014, despite continued demand “I wouldn’t kid myself into thinking that the (upwards) trends we’ve seen over the past five years will continue. I don’t think that’s going to happen at all.

“Credit growth has slowed down, home ownership levels are at record levels and employment growth is moderating. Everything is telling me that this market is going to level out, go sideways. Maybe go through a bit of an adjustment and that process is going to take two or three years, minimum.” – Warren Jestin, Scotiabank chief economist.

Airdrie City View, January 9, 2014: Airdrie and area construction starts rise in 2013 “A lower price point for homes in the surrounding communities over what consumers could afford in Calgary was also a determining factor.” – Richard Cho, senior market analyst, CMHC.

The Globe and Mail, December 23, 2013: Canada’s economy grows more than expected, boosts recovery hopes “Canada’s economy is showing sustained strength for the first time since the early days of the recovery.” – BMO Capital Markets economist Sal Guatieri.

Financial Post, January 3, 2014: Canada’s economic growth outlook too ‘rosy’ “The consensus view that economic growth will accelerate this year is misplaced.” – Economists at Capital Economics.

Calgary Herald, January 10, 2014: New home construction industry on solid footing “Total housing starts in 2014 are forecast to rise, and the number of building permits we have seen thus far would suggest the same. We are also expecting employment and migration to continue supporting demand for new homes.

While gains are expected for both singledetached and multi-family units in 2014, the rise will be more pronounced for multi-family starts.” – Richard Cho, senior market analyst, CMHC.

CANADA:

The Globe and Mail, January 5, 2014: Canada will face pressure to raise interest rates, Flaherty says.

“With soaring personal debt levels and a heated housing market, any rise in interest rates could deliver a sharp jab to the Canadian economy.”

Huffington Post, December 11, 2013: Canada Has Most Overvalued Housing Market: Deutsche Bank “Deutsche Bank estimates that house prices in Canada are overvalued by 60 per cent.

“The new report comes as real estate giant Re/Max predicts an ‘exceptionally healthy’ year for real estate in 2014.”

Calgary Sun, January 7, 2014: It was a year of pleasant surprises The market in Calgary was expected to be better than 2012 and it didn’t disappoint.

“After correcting several years ago, Calgary has reclaimed its title as the strongest major housing market in the nation.” – Doug Porter, chief economist, BMO Capital Markets Economic Research. (continued...)

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OF INTEREST:

Royal LePage, January 9, 2014: The New Year Heralds a Seller’s Market in Canada’s Largest Cities “We predict continued upward pressure on home prices as we move towards the all-important spring market. In addition to normal demand, housing prices in Canada this year will be influenced by buyers who put off purchase plans in the very soft spring of 2013.

“Talk of a ‘soft landing’ for Canada’s real estate market in the new year is misguided. We expect no landing, no slowdown, and no correction in the nearterm. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.” – Phil Soper, president and chief executive of Royal LePage with release of Royal LePage House Price Survey and Market Survey Forecast

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Calgary Sun, January 4, 2014: 2014 likely to mark year of urbanism “The trend to ‘urbanism’ began in Vancouver and Toronto and the Emerging Trends in Real Estate 2014 report from the Urban Land Institute and PwC (Pricewaterhouse Coopers), based on the views of more than 1,000 real estate experts, says ‘urbanism’ will spread to other cities, including Calgary.

Residential development within city limits will be increasingly prevalent in 2014. Reflecting a secular trend toward urbanization and intensification, infill and in-town housing easily have the highest investment and development prospect scores for the year to come.”

The Globe and Mail, January 7, 2013: Will a car in every driveway become a thing of the past?

“Sales figures from North America for 2013 suggest the death of the car has been greatly exaggerated.

But broader trends suggest that auto sales could indeed hit the brakes in the years to come, taking with them their usefulness as an indicator of the health of the economy.”

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members | association Information NEW MEMBERS n November 2013 1639813 Alberta Ltd. DBA Carpet Superstores Rep: Cameron Lang Supplier/Manufacturer/Trade

Merge Developments Corporation Rep: Rick Spooner Builder

Savoy Custom Homes Inc. Rep: John Horning Builder

Wilson Homes Ltd. Rep: Rob Wilson Builder

CANCELLED MEMBERS n November 2013 Beattie Homes Ltd. Consumer Strategies Group (Alberta) Inc. Lexi Park Homes Inc. Unity Builders Group Inc.

n December 2013 BigSteelBox Corporation Dow Chemical Canada ULC Crystal Waters Plumbing Co. Inc. Laurentian Bank of Canada

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c algary home builders foundation | Industry News

By Val Veldhuyzen

Director, Finance and Administration

Going green with GEEP Be e-responsible and help raise much needed cash for CHBF

To support green efforts, we’re proud to be offering a new fundraising initiative that is not only helping our members, but is sustainable and corporately responsible.

And the best part: it supports Calgary Home Builders Foundation and the replacement of two dormitories at Camp Horizon.

CHBF is collaborating with Global Electric Electronics Processing (GEEP) to bring electronic recycling to our members, and CHBF receives the proceeds from perpound dollar rebates.

It’s your chance to safely dispose of any old office electronics — or even provide an easy way for your employees to get rid of their own unused e-materials, from TVs and computers, to unused cable and hard drive discs. See the accepted materials below.

It’s easy and simple to safely collect e-waste. Just follow these steps.

Electronic Recycling 1. Contact GEEP to arrange a date and time for a pick up; they will supply a bin for collection.

2. Gather up as many electronics as possible — from around the office and from the field, or get your employees to bring in electronics from home — prior to the scheduled pick up date.

3. GEEP will come and pick up the electronic material, and a per-pound dollar rebate goes back to CHBF for fundraising initiatives.

Here is some information about what GEEP does with the material: • As an ARMA (Alberta Recycling Management Authority) registered processor, GEEP follows the highest standards of e-waste management: - Less than three per cent ends up going to the landfill; - Strict no-export policy; - 24/7 secured facility to ensure no possibility of a sensitive data leak.

• Shredding of all hard drives that come into the facility.

• Dismantling of material down to the commodity level to be re-purposed in other products.

Interested? Contact Carrie Morrissey at GEEP to arrange pick-up. Phone: 403-219-3137 (ext: 400) or email cmorrissey@geepglobal.com. CHBF will be advised of your company’s involvement to facilitate proper recognition of your company.

Acceptable Electronics are as follows: • TVs • Computer Monitors • Computer Processing Units • Servers (rackmount, desktop, floor standing) • Printers • Fax Machines

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• Laptops • Notebooks • Hard Drive Disks • Tablets • Computer Peripherals: keyboards, mouse, computer speakers, and computer cables.

PHBI | industry news

By Mark Crocker

President, Optimize Consulting

Service with a smile “A man who doesn’t smile should not open a shop” This old Chinese proverb, like so many, holds just as true in modern times as it did centuries ago.

In 1978, when I first came to North America, I was astounded by the level of service which was routinely provided, particularly compared to my then European home. Greeted with a warm smile and genuine interest wherever we took our custom, nothing was too much trouble for the people helping us. In truth, the service really was a memorable factor of the trip.

Sadly, 30 years later, the same cannot be said quite so confidently. Overall, it seems that standards of service have slipped and continue to slip, despite every survey on the matter highlighting that customers are becoming ever more demanding.

So what’s going wrong and what can we do about it?

Well, first of all, we need to do a bit of self-analysis. Ask yourself (and be honest), how are customers viewed in your organization — as an interruption or the person that pays the bills? Are your people leaping across their desks to answer the phone? Are your teams going that extra mile to surprise and delight the client?

Does everyone understand their part in delivering the product or service to the customer?

Next, take a look externally. What are your customers saying about you and your service? Do you take the time to ask them?

Do you have a system in place to capture satisfaction and complaints? How do you compare to your competition?

Continuing the Eastern theme the great strategist Sun Tzu said:

“If you know your enemy and yourself, you will win every battle.

If you know yourself but not your enemy, for every battle won, you will suffer a loss.

If you are ignorant of both your enemy and yourself you are a fool and certain to be defeated in every battle”.

Stirring stuff… but what does it mean for us in a practical sense? Well, unless you operate a monopoly and are the only game in town, there’s plenty of competition (or ‘enemies’) out there looking to take away your business. And outstanding customer service is one of the best ways to compete.

So, how do you get your business ready to compete via customer service?

First, make sure that everyone in your organization “gets it” — gets the fact that the customer is the person who pays the bills — the salaries, the overheads, bonuses and even the Christmas party.

Secondly, make everyone in the organization, regardless of whether they actually connect with a customer directly, responsible for customer satisfaction.

People who serve the customer and people who serve the people who serve the customer, all have a part to play.

Find out what customer service means to each of the people on the team. Help them to understand the importance and show them the way — provide tangible behaviours, implement measures and provide regular, timely feedback on their This excerpt is from an article found on Optimize performance Consulting’s website. against those www.optimizeconsulting.ca measures. Set an example for others to follow.

Ask yourself how seriously you really take customer satisfaction and remember that although your customers won’t love you if you give bad service, your competitors will.

Make everyone in the organization, regardless of whether they actually connect with a customer directly, responsible for customer satisfaction. People who serve the customer and people who serve the people who serve the customer, all have a part to play.

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CMHC | industry news

By Anand Mishra

Senior Research Advisor, CMHC, Prairies & Territories

Understanding the 55+ market What do seniors want in a home, and what options are available to them?

Canada’s seniors are a growing demographic group. If housing developers want to attract this growing segment of the market, they have to understand how seniors’ housing and lifestyle preferences will change as they age.

To help developers plan to meet the housing needs of older Canadians, Canada Mortgage and Housing Corporation (CMHC) has developed an updated, multi-volume series titled Housing for Older Canadians: The Definitive Guide to the Over-55 Market. The first volume in this series — Understanding the Market — offers a detailed look at the housing needs of older Canadians on both the national and provincial/territorial levels, including a discussion of the housing preferences of Canada’s aging population.

Tenure preferences are important to consider. Canadians aged 55 to 64 have the highest rates of homeownership among all age groups; but homeownership decreases with age, as many older seniors downsize to rental apartments or move to retirement homes. This could create opportunities for rental housing providers who build with lifestyle and flexibility in mind.

Ethnicity can also be significant in influencing housing preferences. In general, foreign-born Canadians aged 65 and older are more likely to reside in large urban areas

than their Canadian-born counterparts.

In 2006, 84 per cent of the foreign-born population aged 65 and older was living in Canada’s Census Metropolitan Areas (CMAs). By comparison, only 56 per cent of persons aged 65 and older who were born in Canada called one of these CMAs home.

In addition, specific ethnic groups may also have certain community and housing preferences. For example, some may favour centrally-located neighbourhoods and others may prefer suburban communities.

Developers who don’t have a thorough understanding of these groups and their housing preferences may be wise to partner with non-profit organizations that represent them. The ethnic diversity of Canada’s large cities suggests that there is a market for a wide range of housing options. But understanding the needs of seniors from all ethnicities is vital to the success of any new development.

Access to service and amenities can be a significant factor in seniors’ housing choices. To attract older residents, housing

Research shows that many Canadians aged 55 and over prefer to remain in their home for as long as possible, even if there are changes in their health. profile

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providers in This article is part three rural areas of a three part series should consider on housing for older incorporating Canadians. You can access to public download Housing for transportation Older Canadians at www.cmhc.ca and other essential services in their community planning. Urban developers, on the other hand, may want to focus on developing housing that is well-located relative to existing services.

Research shows that many Canadians aged 55 and over prefer to remain in their home for as long as possible, even if there are changes in their health. These seniors will need housing options and supports that allow them to age in place and to live independently. As a result, developers should ideally also be building homes that can adapt to changing needs as residents age. Incorporating features that facilitate aging into the original plans of a project can be an important and cost-effective selling feature for home buyers of all ages.

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Ne w Home Buyer Protec tion Ac t | industry news

Change for the better New Home Buyer Protection Act provides security for consumers Alberta’s New Home Buyer Protection Act came into force on February 1 so now all builders in the province are required to provide new home warranties — just as CHBA members have for many years.

Our Association supported introduction of the mandatory warranty program because it will extend this important consumer protection to all new home buyers.

Details were still being worked out at press time so it is important for members to watch for updates on the CHBA – Calgary website.

Here’s a snapshot of the new program.

What types of home require warranty coverage?

Warranty is required for houses, condominiums, recreational properties, and modular and manufactured homes unless they will be used as purposebuilt rentals, social housing, Habitat for Humanity, hotels, and motels. Coverage is also required for common property or facilities in a condominium development.

When does a renovation require warranty coverage?

The regulations require a warranty be included for substantial reconstructions where 75 per cent of the enclosed space of a home above the foundation is new.

That means if you started with a 1,000 sq. ft. home, it would be necessary to add another 3,000 square-feet to trigger the requirement for a warranty. Rebuilding a home from walls in and floor up does

not require a warranty. New construction on an existing foundation — after a fire, for example — does require a warranty because more than 75 per cent of the space is new. Renovators are required to warranty elements of the home that are retained.

What is covered and for how long?

Materials and labour are covered for a year; delivery and distribution systems such as electrical, gas, plumbing and heating for two years; defects to the building envelope for five years with an option to purchase two additional years; and structural defects for 10 years. There are coverage exclusions, such as landscaping, site grading, some retaining walls, home appliances, historic resources and designs, and some material or labour not supplied by a builder. Coverage is also excluded for damages caused by weathering, acts of nature, normal wear and tear, shrinkage, alterations not by the builder, improper operation or maintenance.

What are coverage limits?

The limit for a single family home is $265,000; a multi-family home coverage limit is $130,000. There is also up to $3.3 million in additional coverage for common property in each building of a multi-family project.

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When does coverage commence?

For single family and multi-family units coverage begins on the date when the home is first occupied, permission to occupy is granted or the transfer of title is registered. Coverage for common property begins when title of the first habitable unit is transferred to a purchaser and the builder has agreed to prepare a Building Assessment Report (BAR) within 180 days of the transfer of title.

How do I register a home?

Builders will enter information through a secure online portal called MA Connect. Go to the Alberta Municipal Affairs website (www.municipalaffairs.alberta.ca) and follow the link to www.homewarranty.alberta.ca and find the Builder’s Portal link at the top.

Contributed by Paul Cashman, Communications Manager, CHBA – AB

...it is important for members to watch for updates on the CHBA – Calgary website.