Competition heats up for lots in Calgary's inner city
Economist warns fallout from Europe may have effects in Alberta
Calgary's inner-city neighbourhoods are seeing a residential building boom as the sale of building permits continues to soar.
The city recently reported a 95 per cent jump in the sale of building permits last month, compared to the year before.
Cliff DeJong, senior special projects officer with the city, says the sale of building permits has been climbing by huge amounts in the last two months.
"Certainly that indicates to us that activity levels have obviously picked up and so we're looking forward to a fairly active construction season this year," DeJong said.
Calgary developer Danny Shibley says lots are often snatched up in under 24 hours, especially in popular neighbourhoods like Altadore.
"You used to have realtors bring you the lots," Shibley said.
"Now you're getting homeowners calling you, asking you to submit your offer, along with 20 other builders."
In some neighbourhoods, demand has pushed up lot prices as much as 30 per cent.
"The second it hits the market, you've probably got two, three people...already on top of it, doing the drive by and making offers on it," Shibley said. "You’ve got to be quick and you've got to be aggressive."
But the hot market has some worrying about the ramifications if the economy slows down.
A major Swiss bank said Wednesday the European debt crisis has the potential to push the price of oil down to $50 US per barrel.
Todd Hirsch, senior economist with ATB financial, said he thinks it’s much more likely oil will level off rather than plummet dramatically, but he believes builders should still exercise caution.
"Probably a little bit more caution," Hirsch said. "We really don't know where these oil prices are going to end up. They have dipped and that has raised a lot of eyebrows."
"But at this point I don't think there's really any cause for alarm."
Shibley said because of the uncertainty, he will avoid building too much too fast.