Alberta construction projects continue to stay on the rise!

Currently, the value of active commercial construction projects stands at a whopping 153.7 billion dollars, with residential build projects taking up a significant portion at 4.3 billion dollars.

Of that portion, multi-unit residential construction projects comprise about 88% at 3.8 billion dollars.

These amounts have been consistent for roughly the last four years, which shows that the demand for multi-unit residential projects show no signs of slowing down.

Now is the time to get in on the action, so to speak. Multi-unit residential properties are in demand for many Alberta residents – even more so than single-family detached homes.

Luckily, the Canada Mortgage and Housing Corporation (CMHC) has several financial options for those looking to start their next multi-unit residential project.

A Change In Demand: The Rise of Multi-Unit Builds

High interest rates and zoning changes throughout Albertan cities are by and large why this shift in demand has taken place. More and more Alberta residents rent for longer before buying and may, in some cases, be entirely priced out of certain areas.

According to Adebola Omosola, a housing market specialist with the Canada Mortgage and Housing Corporation via the Edmonton Journal, "[Edmonton] actually saw a decline in single-family detached home starts in 2023...more demand moved into the multi-family segment, as more people looked at townhomes and apartments."

The Choice Between Renting and Buying

Indeed, it's the opinion of many young families, couples, and individuals that they prefer the convenience of leasing; many rental agreements include snow removal, landscaping, and maintenance – tasks and responsibilities that they'd otherwise be on the hook for if they owned. In many cases, these individuals feel that renting is a fair price to pay for the security, money, and time they gain back from not having to worry about a fridge repair or frozen pipes.

With that in mind, moving is still a necessity for many renters. Consumer needs change for a variety of reasons – a change in job, a growing family, or the need for more space overall spur many to still try and move where they can. For many individuals, this will more realistically look like moving to a townhome, a condo, or a larger apartment complex – and not a single-family detached home.

How Canada Mortgage and Housing Corporation (CMHC) Helps Project Owners

The consumer need for secure, affordable places to live, can't be overstated.

Yet, multi-unit Alberta construction projects are large endeavours that can come with a variety of nuanced financial requirements – and significant risk – which can make an undertaking like a multi-unit residential project daunting.

Enter the CMHC – "...a financial institution providing housing finance solutions, evidence-based insights backed by the latest research and data, and we deliver the government's housing programs." Their core goal is to contribute to the health of the Canadian housing system by providing funding to support project owners building affordable and sustainable housing options.

The Apartment Construction Loan Program

For multi-unit build projects, the initiative we recommend our clients look into is the CMHC Apartment Construction Loan Program, which "...provides low cost funding to eligible borrowers during the riskiest phase of product development of rental apartments (construction through to stabilized operations)."

The program keeps its focus on standard multi-unit residential projects for the everyday Canadian resident – no retirement homes or student housing, for example.

The loan is meant to be accessible, so the terms for eligible borrowers are quite favourable, with a 10 year term, a fixed interest rate, interest only payments during construction, and with principal and interest due after 12 months of stable gross income.

Ultimately, the CMHC removes much of the risk and financial barriers that can come with a multi-unit residential build. This risk reduction means affordable housing for consumers that may not have the desire or ability to buy – but still want to live comfortably and have the space they need.

Connect with SWMW!

Have questions about the CMHC Apartment Construction Loan program? We can help with the process. While the program is straightforward to get started with, we've had plenty of experience with multi-unit residential builds and with the CMHC process.

Consider the SWMW team for an unmatched customer experience and efficient and timely project execution. Get in touch with the Southwest and Midwest Design & Construction team – and we'll help bring your project to life.

Use our handy online quote request tool or fill out our convenient contact form and a member of our team will be in touch as soon as possible!