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Calgary’s home construction industry has supercharged as the city absorbs record numbers of newcomers arriving in the province — though its increasing population is still nudging home prices higher, housing data show.

The city is an outlier among Canada’s major cities that are struggling to build new homes as they, too, continue to see high immigration.

It comes as welcome news as Calgary’s housing prices have been climbing for several years. It’s also a departure from the rather grim tone at the beginning of 2024, as low inventory and rising prices had become common in Calgary’s housing market.

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Though Calgary’s housing market is recovering from record-low inventory seen as recently as this spring, demand is still outpacing supply, said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board (CREB).

“We’re still playing catch-up,” Lurie said.

Over the first half of 2024, housing starts in the city increased by 38 per cent compared to the same period a year earlier, primarily from multi-unit housing developments, according to the Canada Mortgage and Housing Corp. (CMHC). The city also completed a substantial number of rental units — about 42 per cent of the new housing stock — which has coincided with rental rates tapering off.

In that period, more than 11,600 housing units were added to the market — a sharp increase from the 10-year average of about 6,200.

The construction industry’s record push to meet demand has been countered by Alberta’s record population growth over the past two years, which has accelerated in 2024, according to the latest StatCan data. Alberta’s population grew by 204,000 people between July 1, 2023, and the same date this year, the agency said last week.

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Calgary’s new starts and completion numbers show the construction industry is finally catching up with demand, a lag that often occurs during population booms, Lurie said. However, few of those homes are arriving at affordable prices, she added. The benchmark home price in Calgary has increased 5.5 per cent over the past year to $596,900. (That figure started 2024 at about $570,000)

“We know that over the past couple of years, just with so many people coming into the city, that it wasn’t enough,” Lurie said.

Meanwhile, the pace at which Calgary has built new rental units has been unprecedented: The 4,886 units completed in the first half of the year nearly equalled the number built in the first six months of 2021, 2022 and 2023 combined (5,087).

This has coincided with a long-awaited break from big rent increases. In August, the average rent in Calgary decreased one per cent compared to the previous year, according to Rentals.ca. In August 2023, Calgary’s rents were increasing faster than anywhere else in Canada.

“The fact that you’re seeing that pace of growth come off gives you a really good indication that that means you’re starting to see some supply work its way through the system,” Lurie said.

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Calgary’s housing construction industry could face headwinds on the horizon as Alberta embarks upon a historic effort to build new schools, also a response to the province’s tremendous population growth. The current government has committed to building 30 new schools and eight modernizations every year for the next three years, which could draw on Alberta’s already strained skilled-trades workforce.

Brian Hahn, CEO of BILD Calgary Region, said he’s confident in the industry’s ability to adapt to the forthcoming demand.

“You can’t take it for granted, but the track record of the leaders in those industries has been to find ways to make that happen in a cost-effective and timely way,” Hahn said.

Calgary — and Edmonton, with its 67 per cent increase in housing starts over the first six months of the year after declining in 2023 — is outperforming several major cities, including Toronto, Ottawa and Vancouver, which have all seen worsening figures for housing starts.

Total housing starts in Toronto, for example, decreased 13 per cent and purpose-built rentals fell 40 per cent from the previous year’s record highs. High construction costs and slow sales in Vancouver, meanwhile, resulted in housing starts falling in the first half of the year, CMHC said.

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