Housing slows down but industrial/commercial picks up

In the first three months of 2016, housing starts were slower than normal in the Town of Okotoks. The positive news is that homes are still continuing to sell in town, and the total value of new construction projects has actually gone up.

This past quarter, the Town of Okotoks handed out 30 permits to build new residential structures which is 17 fewer than the 47 permits issued in the first quarter of 2015.  When the Town of Okotoks was preparing its 2016 budget, the prediction was 200 permits for the entire year so projections are off by six or seven permits a month so far.

In looking at non-residential or commercial construction so far, the numbers far a bit better.  New buildings, improvements or renos in the first quarter total $28 million which is nearly 20% better than the first three months of last year. 

Apparently, Okotoks isn’t the only Alberta municipality experiencing the same sort of trend during this recession.  Permits are off budget by as high as 10 housing starts yet for a supposedly sluggish economy the Town seems to be pretty busy, according to an administration spokesperson.

Preliminary reports on the first quarter of activity across the province, gathered from Alberta Treasury Branch, CHMC and administrators from other municipalities show that Okotoks is ahead in terms of growth in the non-residential sector, which includes institutional properties such as schools.  The Town was leaps and bounds ahead in housing construction but now commercial construction is catching up.

Town manager of economic development, Shane Olson, went so far as to say that industrial development specifically has reached record levels this quarter at 8 million.  Compare that to the entire year of 2010, just six short years ago, when the value was a pittance at $355,000. Commercial activity is at $9 million so far this year, which is higher than normal but not record-setting.  In 2015 the total was $4 million for the whole year so the first quarter has been significant.

The construction in these segments is indicative of the fact that people want to conduct business in Okotoks and activity in the industrial and commercial sectors is key as the Town’s population edges closer to 30,000 people.

The Southbank district is where a lot of the action is in Okotoks which will soon have a Save-on-Foods and a medical centre, along with a carwash, an office building, another Tim Horton’s and a microbrewery.  These types of services will support more housing and more real estate transactions in Okotoks, and visa versa.  If more amenities will attract more buyers to the town, that’s good news for the housing market as there’s been a sharp decline in sales in the past 12 months.  Sales are slow but prices aren’t fall at the same rate.  Sellers seem to be holding onto their bottom line with the exception of those who need to sell quickly.

Homes in the $400,000 range are selling the best according to local agents in Okotoks.

It’s taking twice as long to sell as it did in 2014 which is around 60 days.