Alberta residential developers busy banking land and building

Big residential developers are securing huge land parcels in southern Alberta in anticipation of the post-pandemic economic rebound

By
Western Investor
September 24, 2020





Melcor Developments opens 160-acre community in Airdrie Sept. 15. | Kelsey Yates, Airdrie Echo
— Melcor Developments opens 160-acre community in Airdrie Sept. 15. | Kelsey Yates, Airdrie Echo

Alberta housing starts have fallen 15 per cent so far this year compared to a 1 per cent drop in Canadian home building, but Alberta’s 13,600 starts accounted for 68 per cent of all new home construction in the Prairie provinces, according to Canada Mortgage and Housing Corp.

Alberta’s construction pace through the first eight months of 2020 was also just 3,000 units less than in neighbouring British Columbia, where year-over-year starts plunged 23 per cent, the worst performance in the west.

As in other parts of Canada, smaller Alberta communities are seeing much higher sale increases this pandemic-tinged year than in the major cities.

It is data like this has persuaded some of Alberta’s largest residential developers to stake out huge parcels of land, especially in the south, in anticipation for what they apparently see as Alberta’s inevitable post-pandemic recovery.

In Calgary, the most active real estate sector in the second quarter of 2020 was residential land – virtually all in the suburbs – with a 35 per cent share of the $390 million total commercial market, according to Altus Group.

Most of this was due to Qualico Communities, a major Alberta developer, which paid $173,313 per acre for a 490-acre parcel north of Calgary, where the developer has staked out Phase 1 plans for a new mixed-use community dominated by thousands of new homes.

Qualico’s overall plan area encompasses 3,348 acres and is planned to support a future population of 58,800, along with more than 12,000 jobs.

The development could catch a wave that has seen Alberta bedroom communities see significant home sale increases over the past few months.

“Airdrie, Cochrane and Chestermere, for instance, have all seen higher sales year to date,” said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.

As of August, Airdrie sales were up 3 per cent year to date; Cochrane sales rose 5 per cent, and Chestermere increased about 10 per cent from 2019, Lurie noted.

Overall home sales through the multiple listing service within a 60-mile (100 km.) radius of downtown Calgary were up 30 per cent in August compared with a year earlier, following a 33 per cent year-over-year increase in July.

In Airdrie, Graeme Melton, vice president of community developments for Melcor Developments, was on hand September 15 to open the new community of Lanark Landing, where 1,200 homes are planned on a 160-acre site.

Melcor bought the land in 2006. Originally, it was planned to be Airdrie’s first lake community with 80 acres of freshwater. However, the development was downsized due to concerns with the current Alberta’s economy, which has been blindsided by an oil-price plunge and COVID-19.

“We weren’t sure how this opening would go ahead with the added challenges of the pandemic,” Melton said as he joined local officials to cut a ribbon at the giant water wheel that dominates the Lanark Landing entrance.

But the first residents moved into the community earlier this summer, and new homes are attracting more buyers, he said.

“We’ve been able to persevere through this challenge. We’ve seen a lot of sales activity here that I think would’ve surprised people at the beginning of the pandemic. We’re expecting to see great success,” Melton said.

– With files from Airdrie Echo


Frank O'Brien is the editor of Western Canada's biggest commercial real estate newspaper, Western Investor, as well as a contributing editor at West Coast Condominium, real estate contributor to Business in Vancouver and a regular media commentator on real estate investment.
Copyright © Western Investor

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