Apartment starts soar in Alberta as developers capitalize on affordable land

In the first quarter of the year, an unprecedented number of purpose-built rental units broke ground in Alberta, despite the risks brought about by Donald Trump’s trade war.

One reason for this, industry insiders say, is that the cost of land remains reasonable in Alberta, which presents an attractive opportunity for developers looking to capitalize on the Canada Mortgage and Housing Corporation’s MLI Select program, a loan insurance product whose lower premiums and longer terms are meant to incentivize the construction of purpose-built rental projects.

“In Alberta cities, the numbers make more sense for builders on a return basis, based on rents and the cost of building,” says Raymond Wong, vice-president of data operations at Altus Group, a provider of asset and fund intelligence for commercial real estate. “Even though rental rates are coming down, the apartments are very much in demand, and there’s a lot of confidence in the rental sector.”