Pace of MLS annual sales growth outstripping single-family homes
Linda Lam, realtor with Sotheby’s International Realty Canada, in one of The Guardian condo project’s show suites in Calgary.
Photograph by: Jenn Pierce , Calgary Herald
CALGARY - Calgary’s resale condo market is booming these days with the annual growth in transactions far outstripping the pace in the single-family sector.
That is also sparking what could be a record year for new construction in the multi-family segment of the housing market.
“The market for Calgary condos has been strong through 2014. It’s up over 20 per cent year-over-year and we expect demand to continue as buyers and the inventory available becomes more sophisticated,” said Linda Lam, a real estate associate with Sotheby’s International Realty Canada, who has sold condos in both the resale and new condo markets in the city. “We’re seeing more demand from local buyers who are increasingly aware of the benefits of the condo lifestyle: convenience, security, unique amenities and proximity to the city’s downtown.
“The Calgary economy is also attracting professionals from cities like Vancouver and Toronto, who regard Calgary condos as affordable and attractive alternatives to the highly-developed condo markets they are coming from. At the same time, pre-sale condo developments like The Guardian are attracting buyers and investors not only locally, but from other major cities, as Calgary’s real estate market becomes renowned as a stable place to invest.”
The record year for Calgary condo sales was in 2006 with 8,390 MLS transactions - 4,721 condo apartments and 3,669 condo townhouses.
In 2013, there were 7,181 condo sales made up of 4,005 condo apartments and 3,176 condo townhouses.
Year-to-date, up to August 20, there have been 3,232 condo apartment sales, up 21 per cent from last year, and 2,565 condo townhouse sales, up 20 per cent.
“With the single-family market there has been a lot less listings in the lower price ranges,” said Ann-Marie Lurie,
CREB’s chief economist. “So for those people who are looking for product in those lower price ranges, they’re considering their alternatives which include the condo apartment and condo townhouse markets. That’s where a lot of that demand has been because most of the product is in that price range. That doesn’t necessarily exist as much in the single-family.”
She said there is also a factor of a tight rental market and high rents existing in the city currently.
“A lot of consumers are moving into ownership and typically what they look at is the condo-type product because it’s more affordable,” said Lurie.
In July, the city had 2,336 MLS sales, up 3.18 per cent from a year ago. But that was mainly due to a hike in the condo market. Single-family home sales dropped by 1.27 per cent to 1,553 units while condo apartment sales grew by 11.84 per cent to 444 transactions and condo townhouse sales were up by 15.31 per cent to 339 units.
That trend is continuing this month as condo apartment sales have increased by 18 per cent from last year and condo townhouse sales are up by nearly 25 per cent. So far this month, the average sale price for a condo apartment has risen by almost 14 per cent to $344,907 while it has jumped by nearly 17 per cent for condo townhouses to $376,305. Meanwhile, single-family home average sale prices are up by more than four per cent to $542,602.
The luxury condo market has also been strong this year. Year-to-date, there have been 40 sales of $1-million plus properties - 17 condo apartments and 23 condo townhouses. In 2013, a record year, there were 73 luxury condo sales made up of 35 apartments and 38 townhouses.
The demand in the condo market is also being felt in new construction.
According to a forecast by Canada Mortgage and Housing Corp., multi-family starts in the Calgary census metropolitan area will reach 9,000 units this year, a hike of 45.6 per cent from last year.
The most recent high for multi-family starts was 7,051 units set in 2008. Last year, there were 6,182 multi family starts.
“A number of things are prompting construction so far in 2014. First of all we’ve seen some strong demand for housing. Employment has been strong in Calgary along with net migration,” said Richard Cho, senior market analyst in Calgary for the CMHC. “Another factor prompting activity has been inventories. Inventories have come down fairly low historically and that’s also giving opportunities for builders to increase construction this year.”