The City of Charlottetown is seeing unprecedented interest this year from developers wanting to build apartment buildings, and the coming harmonized sales tax could be behind the rush to build.
Peter Brown, president of the P.E.I. Residential Construction Sector Council, estimates residential construction costs will increase by between four and eight per cent next year, when the new tax is implemented.
"Those are big numbers. If it's a million dollars, all of the sudden it's gone up by 40 or 80 thousand," said Brown.
"That's certainly reason enough for somebody to pull the trigger and go a year earlier."
Trouble finding space
Multi-residential units built and proposed
Up until 2009, proposals for multi-unit residential space in Charlottetown generally came in at fewer than 100 units per year.
Last year the city saw a record in multi-unit residential development, with 216 units built. Planning board chair Rob Lantz said there could be more than 500 units built this year.
Lantz said that demand could prove problematic, because the city is running out of empty land designated for apartment or condo development.
"We're actually running out of properties that are zoned properly for multi-unit apartment buildings," he said.
"There seems to be such a high demand, but appropriate development sites are starting to run quite thin."
The HST is due to come into effect on April 1, 2013, and will be set at 14 per cent.
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