Glut of Calgary condos helps first-timers get in the market
With so much inventory available in the apartment sector of Calgary’s real estate market, first-time buyers have affordability and selection – a winning combination.
It’s a silver-lining in the skiffs of cloud hovering over Calgary these days. It’s not only apartments that are proving to be solutions for affordable housing for new buyers but units in all types of multi-family housing developments that are helping people get a toe-hold into real estate. The new mortgage rules that are forcing buyers with less than a 20% down payment to qualify at higher interest rates will also force some to choose homes at lower price points. Disappointing perhaps to those people who in theory can afford more but certainly good news for sellers trying to shift apartments and town homes.
The Calgary Real Estate Board (CREB®) year-to-date transactions in the apartment resale market segment were actually down 19% over the first nine months of 2015 with 2,136 units sold in Calgary. This drop in resale volume has been attributed to the number of new construction apartments and townhomes in Calgary which has been attracting more buyers.
Fewer sales and more listings, with 2.7% more listings in this sector so far this year over the first nine months of 2015. With the apartment benchmark price coming in at $274,700 in September prices have come down by 6.8% creating great opportunities for smart buyers who are watching prices fall.
They’re also watching which areas of the city provide those unique opportunities. For example, apartments in Calgary’s downtown core and the Beltline district south of the CPR tracks are where a large majority of sales are coming from. Almost half of all apartment sales in the city so far this year occurred in these areas and the benchmark price, although less than last year, was $300,900 last month. The second busiest area this year has been South Calgary close to the Marda Loop trading area with 304 transactions. These communities are popular with buyers so no bargains to be had.
Even though new construction is impacting resale activity in the apartment sector, those housing starts are down according to Canada Mortgage and Housing Corp (CHMC). Apartment condos and townhome sales in September dropped by 18%. This year, January to September, starts in this sector have fallen by 7%.
Following the lead of inner-city resale activity, sales of new units downtown and in Calgary’s Beltline are also way up in proportion to the rest of the city. CMHC examined condo possessions from January to June of this year and noted they were way up compared to the first six months of 2015. The absorption of new product in the North West actually eclipsed downtown Calgary in new construction apartment condos and town homes.
These 2016 statistics are certainly telling the story of what types of homes are sought after in our city. Inner-city living with zero maintenance, walkability and affordability seem to be rising in popularity becoming a suburban-alternative. It will be interesting to see if this trend remains when our economy rebounds in the future.Posted by on