Apartment sector prompts optimism for buyers
After living in southwest communities of Midnapore and Evergreen for 27 years, transitioning to an apartment in Mission was an easy decision for Michelle Norman.
“Condo living was a very easy adjustment,” she said. “I like the idea of being surrounded by a good mix of young and older residents as well as not having to worry about such things as yard work and snow removal.”
While saving her back from shovelling, Norman’s apartment also met her requirement for a two-bedroom unit that was pet-friendly and offered easy access to amenities.
“It’s a great location – easy to get to shops, transit, parks and work – so that made the transition even better,” she said.
“There is a good supply of condo inventory on the market, offering first-time buyers an affordable entry point.”
In its 2016 Economic Outlook, RE/MAX Canada noted Calgary’s multi-family segments are prompting optimism in the local housing market – particularly as an affordable solution to housing prices.
“There is a good supply of condo inventory on the market, offering first-time buyers an affordable entry point,” said the report.
“Townhouse-style condos have been selling fairly well, while there is higher inventory and lower demand for apartment-style condos.”
According to CREB®, apartment transactions in the resale sector up to Sept. 30 in Calgary totaled 2,136 units, a 19 per cent decrease compared to the same period last year. Over the same period, listings have increased by a moderate 2.7 per cent to 5,742 – largely due to increased competition from the new home sector.
The sales-to-listings gap has created opportunities for savvy buyers. CREB® reported the benchmark price for apartments in September was $274,700, a 6.8 per cent increase decrease from the same time last year.
Areas such as downtown and the Beltline continue to represent a hot bed of local apartment activity. City Centre has led all districts so far with year with 1,023 units changing hands up to end of September, according to CREB®. South Calgary was second with 304 transactions.
In City Centre, the benchmark price for an apartment in September was $300,900, a seven per cent decrease from the same time last year.
On the new home side, Canada Mortgage and Housing Corp. reported “other” starts, which include townhomes and condo-style apartments, declined by 18 per cent in September, from 990 to 814 units. Year to date, starts have decreased by seven per cent, from 1,299 to 1,205 units.
Much like the resale sector, areas such as downtown and the Beltline also continue to represent a hot bed of local apartment activity on the new home side. In its mid-year update, CMHC noted condo possessions in Calgary increased during the first six months of 2016 compared to 2015, with the Beltline leading the way with 421 absorptions after having none a year earlier. Downtown was third, behind northwest Calgary, with 353 absorptions compared with 131 in 2015.
“Calgary is on a tipping point right now, with condo living becoming a more sought after alternative to suburban life,” said Embassy Bosa president Ryan Bosa, whose company is behind the 223-unit Royal tower in the Beltline, as well as several East Village initiatives.