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Rural residential house building strong in wake of pandemic

Post-pandemic enthusiasm for housing upgrades and scenic lots driving up house building

A pandemic-inspired appreciation for home life may be partly behind a surge in new residential construction in Lacombe County last year.

It was not only the number of residential building permits last year — a historic high — that caught planning services director Dale Freitag’s eye.

What also stood out were the kinds of homes going up.

“We’re seeing many homes coming in at $700-, $800-, $900,000 and even $1 million,” said Freitag.

In all, 80 residential permits for 90 units were handed out last year “which is massive for us,” he added. “In the agricultural community, we’ve seen a significant number of people building single-family homes.”

In 2021, 86 dwelling unit permits worth $29.1 million were issued and in 2020 52 permits were issued worth $17.6 million.

Freitag believes the pandemic and COVID-related travel restrictions that kept many people at home has played a role in the surge in residential interest. He has heard anecdotally that the pandemic convinced some people to unload their vacation properties or to change their mind about buying a home away from home.

“You saw acreages and home building take off during COVID. I think people, if they were going to be in their homes, wanted to be in bigger, nicer homes. Instead of spending their money elsewhere, they are spending their money here in central Alberta.”

A general growth in economic activity — is also contributing.

So far, the strong residential trend appears to be continuing, although January and February are typically slower times of year.

“It’s usually spring that is the real teller,” said Freitag.

In Clearwater County, Nordegg lots are selling out as fast as they are ready and economic development officer Jerry Pratt also sees a pandemic connection.

“In 2020 and 2021 Nordegg was booming, and now we just don’t have any properties left to sell,” said Pratt. More than 40 lots sold in 2020 and more than 30 in 2021.

Nearly 30 lots are being developed in a new block that will be ready in 2024 and nearly two dozen main street lots with ground floor commercial and residential above will be available later this year.

County-wide there were 133 new residential permits issued in 2021 and 85 last year.

“(2021) was the biggest year that I think we’ve ever had,” he said.

Pratt said Nordegg was getting noticed in 2019.

“And when COVID hit a whole bunch of people said we don’t want to live in the city with the disease going on.”

The pandemic also closed access to other places, such as B.C., Washington, Idaho and Canada’s national parks.

“So, people were rediscovering Alberta and a lot people were coming back to Nordegg or maybe discovering our area for the first time. I’m pretty sure it’s the combination of people just trying to get out of the city and also tourists who saw Nordegg for the first time that have really got stuff going there.”

Not all residential sales were in Nordegg. There was also a significant number of people building second homes on farms for their children.

Red Deer County building permit statistics also show residential remains strong. Last year, there were 117 housing starts worth $38.4 million in the county, including Bowden and Elnora. That was down from 162 and $48 million in 2021 but significantly higher than the 82 permits worth $22 million in 2020 and 87 worth $29.4 million in 2019. 2018 was another strong year, with 155 housing starts worth $38.7 million.

When comparing the average value of residential permits in 2022 and 2018, the difference is striking. Last year, the permit average was $334,350. In 2018, the average was $250,129.

“Red Deer County was not only able to hold steady on residential starts over the last few years of uncertainty, but we were also able to grow,” said Treena Miller, director of planning and development.

“We are hopeful to remain at historic norms respecting housing starts in 2023, however high interest rates and construction costs may have some impact. Real estate provides the highest returns, the greatest values, and the least risk in times of uncertainty.”

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