Searching for an affordable option to enter the housing market, more Calgarians are turning to Calgary’s apartment condominium market.
By the end of the third quarter, there were 3,147 condominium apartment sales in Calgary, a 14 per cent rise over the previous year.
“While the condominium apartment segment only accounts for 17 per cent of the sales activity, the rise in demand has been stronger than what has been occurring in the single family market, in part because of the availability of affordable product,” said CREB® chief economist Ann-Marie Lurie. “With less choice in the affordable single-family sector, consumers are turning to the condominium apartment sector.”
Tight market conditions have supported recent price gains for condominiums. However, the September benchmark price of $272,900 still remains well below unadjusted highs recorded in 2007. Through the first nine months of 2013, there have been 5,641 combined (apartment and townhome) condominium sales in the city compared to 4,820 at the same point last year, an increase of 17 per cent. Year-to-date sales growth in Calgary’s condo sector is more than double the levels recorded in the single-family homes market.
“The condominium market offers affordable options for consumers in the city, and the growth reflects that,” said CREB® president Becky Walters. “But keep in mind condominiums still represent less than one third of residential sales within city limits.”
Single-family sales in the city totaled 13,006 units after the first three quarters of the year, a 6.7 per cent increase over the previous year. Single-family sales increased in the third quarter, while the first two quarters were on pace with activity in 2012.
A potential contributor to the number of apartment condos being bought up in the city is the increasing number of new Calgarians. Calgary’s population increased by almost 30,000 people last year for an annual growth rate of 2.6 per cent. During the first quarter of 2013 alone, 27,100 people from other parts of Canada and abroad moved to Alberta — the highest level on record.
With a median age of 36 years, Calgary’s status as one of the younger cities in Canada should continue to drive the condo market. According to Genworth’s Summer 2013 Metropolitan Condo Outlook, Calgary’s condo market is expected to enjoy the highest growth in starts and resale volumes in 2014, with price growth at a moderate level of two per cent to 3.5 percent over the next few years.
As mentioned by Lurie, a key factor in the number of condos trading hands in the city is the affordability present in the sector.
“Calgary’s condominium market remains affordable,” said the Genworth report. “Monthly principle and interest charges on the median priced apartment condominium in 2012 were above only those in Québec City and Edmonton among the eight cities covered in this report. This, combined with high local incomes, means the average mortgage payment should consume only 9.1 per cent of local income in 2013, tied with Edmonton for the lowest among our cities.”