Commercial construction is heating up, but house building continues to lag, according to the City of Red Deer’s latest building permits.
Overall, the value of May building permits — $15 million — was nearly double last month’s and well ahead of May 2018’s $9 million.
Through the first five months of this year, 425 permits worth $67.8 million have been issued, compared with 396 worth $91.3 million a year ago.
Commercial construction has been a bright spot this year. To the end of May, 167 permits worth $52 million have been issued, compared with 93 worth $46.9 million over the same five months in 2018.
Residential construction remains slow with 218 permits worth $10.1 million issued so far this year, trailing the 264 permits and $12.6 million from January through May last year.
In a month-to-month comparison, last month’s 72 permits and $2.4 million is down from the 79 permits worth $3.3 million from a year ago.
Home building has slowed considerably since 2015. That year, 1,063 residential permits worth $75.3 million were issued.
In 2016, the numbers were 795 permits worth $44.2 million; 2017 saw 885 permits and $50.4 million, and last year was 723 permits worth $35.1 million.
One local home builder, who did not want to be named, said the economy continues to be the biggest drag on the new home market. Economic and employment uncertainty mean some are holding off on a major investment such as a new home.
Tougher mortgage rules introduced at the beginning of the year have also taken some people out of the market, said the builder, who estimates four or five home deals fell apart for his company when buyers were turned down for mortgages under new regulations.
Outside the city, on acreages and farms, the home building market is better, driven by people who can comfortably afford a new home, said the builder.
pcowley@reddeeradvocate.com
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