Calgarians like their condos.
As if the number of construction cranes scattered throughout the city weren’t proof enough of our city’s affinity for all things condo, Calgary homebuyers were happy to provide further evidence with their purchases.
Last year, there were 7,187 condos sold in Calgary, an 18 per cent increase over 2012. One key factor in the number of sales taking place was the relative affordability found in the sector. While the benchmark price in the s i n g l e -family sector stood at $472,200 in December, the condominium apartment and townhouse prices totaled $278,600 and $307,100, respectively.
“The condominium market is more affordable than single-family, and that is attractive to first-time buyers who are weighing rising rental costs against ownership costs,” said 2013 CREB® President Becky Walters. “Investors are also attracted to condos, because prices have not yet fully recovered to their previous highs.”
Stronger sales activity in the second half of 2013 can be attributed to rising lending costs motivating some to buy sooner than they had planned. In addition, the June floods placed even more strain on Calgary’s already cramped rental market, moving some people into ownership sooner than anticipated.
“In addition to lifestyle preferences, condominiums appeal to thoselooking for more affordable ownership options,” said CREB® Chief Economist Ann-Marie Lurie. “Some consumers look to low vacancy rates, rising rents and low returns in alternative investments and opt to use condominiums as an investment opportunity.”
The level at which developers have been attracted to the condo sector is evident in the level of construction underway in and around Calgary. After topping 5,670 in 2013, multifamily starts in the city are expected to climb to 6,612 in 2014, an increase of 16 per cent.
In 2014, sales in the sector are expected to rise again, as rising prices in the single-family sector push buyers towards the condo market. Condo apartment sales are forecast to rise by five per cent to 4,207 units while the benchmark price will increase by 5.8 per cent to $281,798. In the townhome market, sales are predicted to jump by eight per cent to 3,434 and the benchmark price to go up by 4.75 per cent to $308,690.