Condo sales growth in Calgary continues to outstrip the singlefamily sector while helping to drive what could be a record year for new multi-family construction.
To date this year, 3,232 condo apartments (up 21 per cent from Aug. 20, 2013) and 2,565 condo townhouses (up 20 per cent) have sold as buyers seek out affordable options.
“With the single-family market there has been a lot less listings in the lower price ranges,” said Ann-Marie Lurie, CREB’s chief economist. “So for those people who are looking for product in those lower price ranges, they’re considering their alternatives which include the condo apartment and condo townhouse markets.
“That’s where a lot of that demand has been because most of the product is in that price range. That doesn’t necessarily exist as much in the single-family.”
Lurie said the city’s tight rental market and increasing rents are also leading people to buy.
“A lot of consumers are moving into ownership and typically what they look at is the condo-type product because it’s more affordable,” she said.
Total MLS sales in July were 3.2 per cent ahead of last year due to rising condo sales.
While single-family home sales fell 1.3 per cent last month, sales of condo apartments (up 11.8 per cent) and condo townhouses (up 15.3 per cent) both increased. That trend is continuing in August as condo apartment sales are up 18 per cent over last year and condo townhouse sales have grown 25 per cent.
“We’re seeing more demand from local buyers who are increasingly aware of the benefits of the condo lifestyle: convenience, security, unique amenities and proximity to the city’s downtown,” said Linda Lam, a real estate associate with Sotheby’s International Realty Canada.
Pre-sale condo developments are attracting not only local buyers and investors but many from other major cities as well “as Calgary’s real estate market becomes renowned as a stable place to invest,” she said.
The luxury condo market has also been strong with 40 sales of at least $1 million – 17 condo apartments and 23 condo townhouses. In 2013, a record 73 luxury condos were sold.
The record year for all Calgary condo transactions was 2006 when 8,390 MLS properties – 4,721 condo apartments and 3,669 condo townhouses – were sold. Last year, 7,181 condos were sold.
According to Canada Mortgage and Housing Corp., multi-family starts in the Calgary area will reach 9,000 units this year, a 45.6 per cent increase from last year.
The most recent high for multifamily starts was 7,051 units in 2008. Last year, there were 6,182 multifamily starts.
“A number of things are prompting construction so far in 2014. First of all we’ve seen some strong demand for housing. Employment has been strong in Calgary along with net migration,” said CMHC analyst Richard Cho. “Another factor prompting activity has been inventories. Inventories have come down fairly low historically and that’s also giving opportunities for builders to increase construction this year.”
Mario Toneguzzi, Calgary Herald
Published: Friday, August 22, 2014