Home warranty organization strives for satisfaction in new home buying experience

It’s been 40 years since a delegation of Alberta home builders disrupted a national industry conference by putting forward a motion to allow the establishment of home warranty programs that would be operated by provincial associations and without federal government involvement.

It was 1974, the same year OPEC removed its oil embargo, heiress Patty Hearst was kidnapped by the Symbionese Liberation Army, and U.S. president Richard Nixon resigned, so it’s no surprise this made-in-Alberta, industry-changing announcement didn’t rate front-page coverage. What the fledgling New Home Certification Program of Alberta, the first provincial home warranty program in Canada, did do was forever change the relationship between builder and homebuyer across Alberta.

Today, as the Alberta New Home Warranty Program (ANHWP), it continues to ensure both buyer and builder retain a healthy relationship during and after construction.

John Martin, named vice-president of business development for the builder-funded ANHWP just two weeks ago, has as part of his mandate the responsibility to not only attract new members, but to keep a watchful eye on the two-way relationship.

“I want to ensure the satisfaction level of the builder-membership and quarterback any needs they have,” he says from his Calgary office. “And I also want to be diligent in making sure everyone, builder and homebuyer, is happy.”

Martin, who has 15 years experience in the home warranty sector, mostly with the rival National Home Warranty Program Ltd., was named to his newly created position by John Kozole, ANHWP’s president and chief executive.

“(ANHWP) is very focused on our ability to provide exceptional service to our customers. This position is entirely new to our organization and we are excited to have someone with John’s experience lead the way on this initiative,” says Kozole, who heads up the 700-member organization.

Still settling into his new role, Martin says there is much to do in the days ahead to make sure ANHWP maintains its standing as the “premier provider” of home warranty protection in Alberta and Canada.

“I have always had respect for what this program does for the homeowners, as well as for its builder members,” he says. “The after-sale service provided through the program has always been great, and it will be part of my responsibility to get even better at it by focusing on what we can do better for the homeowner, and for the builder.”

The ANHWP mandate is to provide an array of warranty products that offer comprehensive protection and provide builders and homeowners with the resources to resolve issues, honour specific industry standards, and to become better educated about the new home construction process. Among its services are pre-possession insurance, 10-year protection against structural defects and other coverages ranging from one to five years. It also offers arbitration and mediation services. And with the implementation earlier this year of mandatory warranty coverage, ANHWP played a key role in forming the new coverage levels required by the Alberta government, something Kozole says is “validation of the strength” of ANHWP.

“In the world of mandatory warranties, we continue to thrive, so in that way it’s business as usual,” says Martin, who adds that ANHWP’s products and services being offered exceeds the mandatory levels.

 

Sales of homes over $1 million hot in Calgary

Money is on the move in Alberta and it’s showing up in Calgary’s luxury market.

A recent report by Statistics Canada — to no surprise — says Alberta tops all provinces in weekly earnings. On average, Albertans pull in $1,128.31 per week. This number includes overtime pay and is seasonally adjusted. The next highest earners are on the east coast, where people in Newfoundland and Labrador bring in a weekly cheque of $967.98. Saskatchewan comes in third with $961.90 weekly.

Like any area, it’s easy to see where the big money jobs are based on the health of its luxury home market. And in the Calgary area, it checks out just fine. Calgary is noted as a haven for corporate head offices, where presidents and chief executive officers preside.

“There are lots of people doing very well in Calgary right now and when they do well they tend to buy expensive homes,” says Canada Mortgage and Housing Corp. regional economist Lai Sing Louie. During the first two months of 2014, about eight per cent of new homes absorbed were priced $1 million and higher, says CMHC. During the same time last year, it was five per cent. Absorption refers to the time in which a buyer takes possession of their home.

“I think what you’re seeing is people in the oil and gas sector, when wages rise in that area, the economy is doing well,” says Louie. “We’ve had oil hovering at over about $100 a barrel for a while now. That’s creating a lot of income for a lot of people.”

Look at the construction crews covering lots in high-end communities in and around the city. Builders say show-home traffic at their big-ticket homes is on the upswing.

“The interest in million-dollar-plus homes is robust,” says Jordan Tetreau, director of sales and marketing for Trickle Creek Custom Homes. The company is part of the builder group in Watermark.

“One major driver is that the supply of developable land is scarce in and around the City of Calgary, while demand for new and pre-owned homes remains high, thanks to a strong economy and steady population growth,” adds Tetreau.

“This demand is driving up the cost of land and subsequently the price of new homes. For instance, in highly sought-after neighbourhoods like Altadore and Marda Loop, a well-situated 50-foot wide building lot will likely sell for over $700,000.”

Between Jan. 1 and the end of April, 265 homes sold for at least $1 million on the resale market. This is 13 per cent more than the 235 million-dollar homes that changed hands a year earlier.

Louie says Calgary’s tight housing market has allowed sellers to reel in sizable equity. They take these dollars and turn to something in a higher price bracket.

“There’s a lot of opportunity for move-up buying now,” says Louie, adding it wasn’t long ago the city was in buyers’ market conditions. In 2012, the market saw balanced conditions before shifting to a seller’s advantage today.

“People are getting more than the list price,” adds Louie. “We’re hearing about multiple offers on homes and that’s putting upward pressure on prices and supporting the move-up buying market.”

 

 

Calgary new home price growth tops Canada – 7.5% year-over-year hike in March

The Calgary region continued to experience the biggest hikes in new home prices in March, leading the country, according to Statistics Canada.

The federal agency reported Thursday, through its New Housing Price Index, that prices in the Calgary census metropolitan area rose by 0.8 per cent on a monthly basis and by 7.5 per cent year-over-year.

Nationally, prices were up 0.2 per cent from February and by 1.6 per cent from March 2013.

“The metropolitan region of Calgary was the top contributor to the (national) gain, marking the third consecutive month it has led the way in Canada. The region also experienced the largest monthly price gain, up 0.8 per cent over February. Builders reported that higher material and labour costs, market conditions and the cost of developed land were the primary reasons for the increase,” said Statistics Canada.

“The year-over-year increase in Calgary was the largest since July 2007.”

And a report released Thursday by the University of Calgary’s School of Public Policy suggests the city could see even higher prices in the coming years due to limitations on suburban growth.

The report entitled ‘Calgary and Edmonton on Divergent Development Paths: Municipal Policy is Densifying Calgary’ said traditionally the two cities have focused on suburban expansion to accommodate their growing populations, but those cities are now moving down different development paths.

The report, by authors Zack Taylor, Marcy Burchfield and Anna Kramer, said that beginning in the late 1990s, Calgary shifted its focus to livability and sustainability, a move that saw policies introduced to promote urban intensification and greater transit use.

“If you keep putting more people on the same land that’s available, land prices are going to go up,” said Jack Mintz, director of the School of Public Policy.

“There’s some value to intensification. You don’t want to empty out the core . . . But there’s a balance you need to think about and I think Calgary from all the stories you hear about lack of development and things like that, we could be in for very significant price inflation over the coming year or two.”

Todd Hirsch, chief economist at ATB Financial, said that while Calgary continues to shine with strong new home price growth, Edmonton prices have fallen flat.

Prices in Edmonton are about 0.1 per cent lower than a year ago.

He said prices in Edmonton are nearly 10 per cent lower than they were in 2007.

“The contrast between prices in the major cities is puzzling,” said Hirsch. “Both cities continue to fare well economically. Edmonton actually holds a slight advantage in the labour market: its unemployment rate in March was 4.8 per cent, slightly lower than Calgary’s 5.0 per cent rate.

“Some of the difference could be explained by the ongoing recovery from last year’s floods, which is still having an impact on material prices and building costs.”