The construction of new, single family homes in the US may have stuttered but multi-family developments are continuing to grow.
February saw single-family construction starts drop by 17 per cent on January across the US, the Commerce Department reported. This was partly put down to the cold winter much of the country has experienced. However permits to build single family dwellings dropped to the lowest number in February for over a year.
However the report said total residential building permits climbed in February thanks to an upturn in multi-family construction starts. Multi-family buildings are apartment blocks.
In fact 2014 was a good year for apartment construction in the US with CBRE stating total investment volume in US multi-family properties totalled $106 billion in 2014, a 7 per cent climb over the prior year and surpassing the prior peak of $105.1 billion set in 2007. Multi-family is the first property sector to return to 2007 sales levels with this milestone.
“Multi-family investment soared to new heights in 2014. The sector continues to show its resilience as a safe haven for global investors looking to make their way into the US. In 2015, we anticipate total investment volume to match or exceed 2014 levels as deployment of capital into real estate from new investor types, in particular, insurance groups from China and Taiwan, and Chinese property companies continues to accelerate,” Brian McAuliffe, Executive Managing Director, Institutional Properties, CBRE Capital Markets told the World Property Journal.
Michelle Meyer, deputy head of US economics at Bank of America in New York agreed telling Bloomberg, “Increased household formation, an improving job market and rising wages for younger people all point to a pickup in housing.
“Many will gravitate to apartments and other rental units, so multi-family should do well and continue to lead the recovery.”