CREB®Now Archive

Smaller stature doesn’t have to mean lower expectations

Whether it’s empty nesters no longer in need of a family-sized home or homeowners discovering they no longer need so much space, downsizing has become a popular trend in the real estate industry.

The opportunity to shed excess space – usually for a profit – and purchase something smaller has proved too alluring to resist for many Calgarians.

“Making a move to a more affordable house and renovating it to make it more efficient and organized will ensure I enjoy living in it even if it’s not a mini mansion,” said Angela Hendry, who recently downsized to a smaller home due to a change in her marital situation. “So the upside is I will have a very reasonable mortgage right now, and when the interest rates go up I will still have a beautiful home to live in that I can still afford.”

Faced with the challenge of moving into a smaller space and the obstacles that can accompany such a change – including streamlining your lifestyle and belongings to fit your new surroundings – Hendry has her own advice for those who find themselves in the same situation.

“Maybe you buy a smaller place (in the) inner city but you go down to one or no car? Use Car2Go instead,” she said. “Have the kids moved away? Maybe a two-bedroom can still work. There is good value in the suburbs for smaller bungalow, but with basement development you actually don’t lose much space.

“How can you create a compact home and still have room for everyone? Smart furniture choices can do wonders. Lots of European design out there to create space in smaller places.”

Calgarians, downsizers or otherwise, have the benefit of living in one of Canada’s most affordable markets – particularly as it relates to condominiums. According to RBC’s Housing Trends and Affordability report from the fourth quarter of 2014, the average Calgarian would need to part with just 20 per cent of their household income to purchase a “standard” condominium in the city – unchanged from the same period in 2013.

The report calculates the proportion of pre-tax household income needed to service the costs of owning specified categories of homes at current market values.

In comparison to Calgary, the average Torontonian would need to part with 33.9 per cent of their household income to purchase a standard condominium in the city, Vancouverites 39.9 per cent and Edmontonians 21.3 per cent.

“Calgary became a buyers’ market in the fourth quarter following a prolonged period of nearly three years when sellers had the upper hand,” said Craig Wright, senior vice-president and chief economist for RBC. “Demand-supply conditions in most other local markets remained generally balanced with the exception of Vancouver, which stood out as a sellers’ market.”

Overall, RBC’s affordability measures for Calgary fell 0.2 percentage points to 20.0 per cent for condos, 0.4 percentage points to 33.9 per cent for two-storey homes and 0.6 percentage points to 33.7 per cent for bungalows in the fourth quarter of 2014.