With Calgary’s condo market experiencing a period of oversupply, determining how to make the best deal, whether you’re a seller or a buyer, is crucial. That starts with assessing the many factors that can affect a condo’s resale value, says Vijay Thankey, a REALTOR® with RE/MAX Realty Professionals.
“Unattractive common areas and high condo fees are two of the biggest factors,” he said.
The following are other crucial factors that will affect a condo’s resale value:
Appearance Thankey recommends upgrades to get top dollar. Spring for $5,000 on new paint and flooring before it goes on the market, and it will likely sell faster and closer to the asking price.
“I take my sellers to a brand-new condo and show them the trends,” he said. Even new window coverings can make an impact, he adds.
Special Assessments These are levies that can be imposed on condo owners, either in the form of a lump sum or recurring payment, to cover emergency expenses or reserve-fund shortfalls for capital repairs or replacements. Thankey says they can increase costs significantly.
“Sometimes they increase the condo fees, sometimes they go to the owners and ask for X amount,” he said. “Now, when you try to sell that condo, the fees are very high, and you have to drop the price quite a bit to make the sale.”
Age Thankey recommends people buy a condo that’s five-to-seven years old, since it will still have some life in it, and is less likely to require costly upgrades. If you buy an older condo, he says, request to review the condo’s financial statements, and its reserve fund and plan. Spend a few hundred dollars on a lawyer to review these documents to avoid surprises.
Location Condos built near expensive homes in newer suburbs, such as Cranston or Silverado, are more likely to retain value compared to those in other areas. Area amenities, either established or planned, are also an important factor. Condos that have nearby restaurants, shopping, good parking, recreational facilities and pathways are going to have higher resale value.
Within a condo itself, end units are more desirable, because that’s one fewer neighbour sharing a wall. Being close to an elevator is good, if it’s quiet. The nicer views in condo highrises are near the top, says Thankey, so the higher you go, the more your condo will sell for.
Wood frame vs. Concrete Wood-frame condos are shorter – maxing out at six storeys tall in Calgary – but they tend to be noisier than concrete buildings, leading to lower resale value in most cases.
“Concrete is better and much quieter, in my opinion,” said Thankey. “Wood frame, you will get complaints from tenants about the noise.”