Calgary is a young city, and it has the homebuyers to prove it.
According to a survey from BMO Economics, Calgary is home to the youngest first-time homebuyers in all of Canada. The survey showed the average age of those Calgarians entering the housing market for the first time to be just 32-years-old compared to the national average of 36-years-old.
“A number of factors and trends are causing young adults to push back major life transitions. When buying a first home, one of the most evident is rising real estate prices,” said Laura Parsons, mortgage expert, BMO Bank of Montreal.
The trend to delay major decisions was shown by the fact the current generation of homeowners made their first purchase before the age of 30. A major factor pushing today’s homebuyers towards purchasing their first home later in life is the comparative cost of owning a home. The BMO report said the average home price in Canada has risen 83 per cent over the past 10 years.
Demonstrating the eagerness of Calgarians to enter the housing market in spite of increasing costs, a report from The Conference Board of Canada and Genworth showed sales of existing condominium apartments experienced double digit gains in each of the last two years. According to CREB®, through the first three months of 2014, sales of condo apartments in Calgary have increased by 28 per cent. Having contemplated entering the housing market for the last year,
Blair Berdusco purchased her downtown condominium in February. At 29-years-old, Berdusco fits perfectly with BMO’s picture of a first-time buyer in Calgary. In addition to affordability, she said lifestyle was a key feature in her purchase.
“I went with a condo mostly because of price,” she said. “Other factors were the fact that I am a single female. A condo provides a bit more security, it also provides for fewer upkeep responsibilities on my part. Also, I prefer living inner-city, or close to, really just not the suburbs, and the single-family homes closer to downtown are either too expensive or too old and require a lot of TLC.”
According to the Genworth report, the median price of a Calgary apartment condo was below that of Montréal, Toronto, Ottawa, Vancouver, and Victoria, sitting at just $252,500 in 2013. Accordingly, mortgage carrying costs on the medianpriced apartment condominium consumed only about 9.3 per cent of average household income, the lowest among the eight cities included in the report.
“Condominiums have been a steadily growing segment of the Calgary market for a long time,” said CREB® President Bill Kirk. “This is both a reflection of the acceptance and demand for multi-storey, downtown living. Buyers can have the turn key lifestyle where one can leave for a month and not worry about the property too much combined with the affordability of sharing the living
and operating costs for a well located facility.”
In the survey, Calgarians were more likely than the average Canadian to purchase a home while single at 54 per cent compared to 50 per cent nationally. According to the Genworth report, those between the ages of 25 and 39 represent more than a quarter of Calgary’s population, which stood at 1.15 million as of the 2013 census. Calgarians also boasted the highest average incomes in the survey, with the average household bringing in $71,000.
“Calgary provides for great options as far as lifestyle and employment, so when you factor in where the condos are being built, it provides great opportunities for community building, networking and a draw for new businesses to downtown,” said Berdusco.
The tendency of Calgary buyers to snap up apartment condos is also evident in the level of construction seen around the city. According to The Conference Board of Canada’s forecast for Calgary, there were 2,432 units started in 2013, along with 4,309 units under construction. Moving forward, they are predicting starts to increase by 6.9 per cent in 2014 and a further three per cent in 2015. Providing further evidence of the appeal found in the sector, and the Calgary market as a whole, is the decline in the months of supply in the new condo market. In 2011, the months of supply number sat at 5.7, meaning at current sales levels it would take just under six months to exhaust the number of units on the market. According to the report, that number now sits at just 1.1 and is expected to fall even further in 2015.