Much like most of Calgary’s real estate scene, condos in the city are finding themselves in high demand.
Through the first seven months of 2013, combined (apartment and townhome) condominium sales in the city have increased by 16 per cent over the previous year. In July, combined condo sales shot up 26 per cent over the same month in 2012, a clear indicator momentum in the market is rising.
“Condominium sales started to grow in 2012 and the momentum has continued this year,” said CREB® Chief Economist Ann-Marie Lurie.
Between January and July, 4,393 condos changes hands in Calgary, with nearly 700 of those sales taking place in July alone.
According to Lurie, the increase has come in part due to the relative affordability and availability present in the sector when compared to other housing options.
“With less choice in the lower price ranges of single-family homes and tighter mortgage rules limiting what consumers could afford, many purchasers have turned to the condominium market,” she said.
Year-to-date, there have been more new listings priced under $400,000 in the condominium sector than in the single-family market.
“Clients looking for affordable homes are considering community, product and price,” said CREB® President Becky Walters. “While there are affordable single-family homes in some communities, some may prefer condominiums in the same price range so they can live in a preferred community or get a home that requires less renovation.”
Such factors played a key role in Shannon Turnbull purchasing her condo in 2009. Her first home purchase, Turnbull said in addition to affordability, the condo sector provided selection she couldn’t find elsewhere.
“There were definitely more condos available for my budget, and they also required minimal to no maintenance,” she said. “Where with my budget I would have had to invest in an older property requiring renovations, which made me worry about unforeseen costs.”
Along with providing Turnbull the security of owning her own home, she said by renting the property, she’ll be able to increase her odds of moving into a single-family home when the time comes.
“Eventually I can turn my condo into a rental property when I need to upgrade to a house. As well, it is a great way for me to build upon my equity without having to break my budget and invest in a single-family home.”
In addition to the number of condos changing hands, the high demand has also impacted the price at which they’re being purchased. In July, apartment and townhouse condominiums recorded benchmark prices of $267,600 and $294,500, respectively, representing an eight per cent increase for apartments and a 6.2 per cent increase for townhomes. Despite the annual combined average increase of seven per cent, prices remain over 10 per cent below unadjusted benchmark highs.
Earlier this year, a report from RBC ranked the affordability of Calgary’s condo market amongst the best in Canada, trailing only Edmonton. According to RBC, the standard condo purchase in the city would require the average Calgarian to part with just 22.9 per cent of their pre-tax household income.