Rise in listings adds options to condo market
Calgary’s housing market was a welcome sight to many new homebuyers in January, particularly those dipping their toes into the attached and apartment sectors.
Citywide listings in the categories ballooned by 38 and 52 per cent, respectively, in January compared to the same period last year. Sales, meanwhile, declined by as much as 43 per cent – creating, when combined with an increase in listings, an influx of inventory and thus more options for would-be buyers.
“Attached is defined by CREB® as a property attached to another property in any form without internal hallways. Apartments are classified as those that are attached to another property via internal hallways. Condominiums can fall into both categories.
Benchmark prices for both categories, meanwhile, recorded slight month-over-month price declines. The attached sector remained stable at $356,000 from $356,200 in December, yet was still up 7.5 per cent from $331,100 in January 2014.
Benchmark prices in the apartment sector fell to $298,700 from $300,400, yet increased more than six per cent year over year from $280,800.
In addition to more choices and improved affordability, homebuyers were presented with some surprise news from the Bank of Canada when it lowered its overnight lending rate from one to 0.75 per cent. Some banks, as a result, have since dropped their five-year fixed rate to as low as 2.84 per cent.
In a recent survey from BMO, 16 per cent of respondents indicated the recent decrease in interest rates will allow them to afford a home sooner than anticipated.
“With proper financial planning, a decrease in interest rates can mean paying down existing debt – such as a mortgage – sooner than planned, which can have a positive long-term impact on Canadian households,” said Martin Nel, vice-president of Personal Banking Products for BMO.
“That said, rates will not stay low forever, so it’s important that Canadians be realistic in terms of what they can afford down the road when interest rates eventually rise.”
In the survey, more than one-third of Canadians (36 per cent) felt lower interest rates would have a positive impact on their overall financial situation.
Added inventory, combined with low-interest rates and stable prices, has some new homeowners in Calgary also considering entering the investment property market.
Jordan Meloche and finacee Ashley Hopkins recently purchased an apartment-style condo in the northeast community of SkyView Ranch. Meloche said while they don’t plan on renting out their new pad in the immediate future, they are considering it down the road.
“We’re getting married, so I could see starting a family in the next few years,” he said. “So it’s somewhere we would fit and be comfortable, as well as somewhere we could kind of make an investment other than just by buying a house. Whether it’s renting our property out after, or with it being new and the land out there developing, we could sell for a profit later on down the road.”