A sharp rise in the number of building permits in Edmonton bodes well for some real estate developers, but not for those wanting to build condominiums. Statistics Canada, a major data supplier, revealed a 61 percent jump in the value of building permits in Edmonton in October versus September. The value rose from $363.4 million to $587.7 million, suggesting a rebound in the local realty market.
Despite this positive news, the majority of the permits issued were either for single-family homes or commercial development projects. Banks have become more stringent in lending to condo developers, insisting that developers must sell more than 50 percent of the units in a proposed building before actual construction begins. According to housing analyst Richard Goatcher, the Edmonton market has a surplus of unsold condos that need to be purchased before the onset of additional development. Goatcher noted that the current inventory of condo units renders it unlikely that potential buyers will want to wait some two years before a condo they purchase is actually habitable.
Developers want to initiate construction immediately, to make the most of reasonable construction prices. These developers are also finding that offshore banks offer attractive financing, as opposed to those in North America that have stricter requirements.
Onetime city planner Armin Preiksaitis now consults with area developers, and is involved with three new-construction condo projects. He predicts a healthy consumer demand for the units, which should be available for occupancy in 2012.