Calgary’s construction industry rounds out first quarter with $1.3 billion in construction value
The first five months of 2023 have marked a strong and promising start for Calgary’s development and construction industry. There were 4,846 total building permits issued between January and April 2023 and while building permit volumes have decreased by 14 per cent from this time last year, total construction value has seen an increase of six per cent year-over-year, with a total value of $1.7 billion in construction value so far in 2023.
“Our construction value in 2023 demonstrates the confidence there is to invest in our city,” says Stuart Dalgleish, general manager of Planning & Development Services. "With the construction industry contributing approximately 8.6 per cent to Calgary’s GDP, the number of projects being built is very healthy for our city, our economy and the future of Calgary.”
There were 1,327 permit applications submitted for commercial, industrial, institutional, and multi-residential projects from January to April 2023, down eight per cent from 1,440 applied for in the same timeframe in 2022. 2,865 permits applications were submitted for residential improvement projects, a seven per cent decrease from the same time period last year.
“A decrease in the overall permit volume applications for residential home improvement projects is expected as Calgarians deal with increasing interest rates and cost of living,” says Dalgleish.
New home construction saw a 27 per cent decrease in permit applications, with 1,526 applications for single and semi-detached homes in the first four months of 2023, compared to the 2,095 applied for in 2022. Of interest, apartment building construction value saw a 170 per cent increase from $109 million in Q1 2022 to $293 million in Q1 2023.
“With existing housing supply levels remaining low and population growth in Calgary remaining steady, enabling access to housing supply remains our top priority,” says Dalgleish. “Though our total permit application volumes for single and semi-detached homes have decreased in the first four months of the year, construction value is higher than pre-pandemic levels.”
According to CREB’s 2023 Calgary & Region Q1 Quarterly Update Report, new home listings declined by 40 per cent in the first quarter and inventory levels were 21 per cent lower in the first quarter than the same period last year. Though residential sales activities have slowed, housing sales are still above pre-pandemic levels due to strong migration to Calgary, coupled with a strong employment market in our city.
Initiatives such as the Downtown Development Incentive Programs, designed to support the revitalization of Calgary’s downtown core offer creative solutions to create greater housing diversity. In March 2023, The City expanded the incentive program to include projects for hotels, schools and performing arts spaces. These conversion categories will encourage a more diverse mix of amenities and services downtown. Also of note, real estate developer Strategic Group announced plans in March to convert the historical Barron Building from office space to 118 modern residential rental suites and street-level retail, with plans to open in the fall 2024.
“The Downtown Calgary Development Incentive Program is part of The City of Calgary’s goal to address oversupply of office space from the downtown and to create greater diversity of use,” says Dalgleish. “Projects like the Baron Building conversion contribute to housing supply, increase the vibrancy of downtown, minimize construction waste and reduces greenhouse gas emissions.”
With construction remaining steadfast, 71, 658 building, trade and development inspections were completed from January to April 2023, up 18 per cent compared to the same period in 2022.
“In spite of procurement challenges and supply shortages impacting the construction industry both locally and nationally, our partners in development continue to ensure Calgary remains unwavering to growing, preparing for its future, and holding its status of one of the world’s most livable cities,” says Dalgleish.
Many notable projects were completed at the start of 2023 to round out the first quarter and further support our city’s growth, including:
· Oliver Tower, a 32-storey residential complex featuring 403 housing units, located in the community of Beltline and valued at $95.6M.
· Barlow Crossing Building, a new 244,000 square foot warehouse, located in South Foothills and valued at $25M.
· Cedarglen Harvest Hills, a four-storey, residential low-rise building, featuring 120 housing units, located in the community of Harvest Hills and valued at $21.1M.
· Seton 105, a new low-rise apartment building in the community of Seton, featuring 103 housing units and valued at $15.3M.
· The Capella Building, a luxury mixed-use residential condo development located in the University District with certified LEED-ND Platinum rating valued at $14.4M.
· The Bayside, a 46,000 sq-ft school serving kindergarten to grade four students in the community of Auburn Bay, valued at $13.4M.
· Fish Creek Exchange, a low-rise apartment complex that will provide 60 apartment units in the community of Shawnee Slopes, valued at $13.1M.
· Centaur Subaru, a three-storey car dealership serving Subaru customers in the community of Parkhill, valued at $12M.
· Enright 7257, an office and warehouse commercial development located in the community of Great Plains valued at $11.6M.
· Hillhurst 19+2, a 51 unit, five-storey mixed-used development, offering both housing and retail options to the community of West Hillhurst, valued at $10.1M.