Rental-specific apartment towers rumoured to open soon
BY MYKE THOMAS,CALGARY SUN
FIRST POSTED: SUNDAY, FEBRUARY 23, 2014 02:00 AM MST
Nationally, sales were down 3.3% from December, the fifth straight monthly decline.
“Sales were down on a month-over-month basis in more than 60% of all local markets in January, with declines in Greater Toronto, Greater Vancouver, London and St. Thomas, Windsor-Essex and a number of other southern Ontario markets,” said CREA president Laura Leysar, adding extremely cold weather in the east likely resulted in some measure of the decrease.
Calgarians enjoyed a relatively mild January, which may have influenced the 7% increase in sales from December to January and a 15% increase year-over-year.
The dollar value of transactions in Calgary last month was $800 million on 1,802 sales, a 22% jump from $659 million in January 2013.
New listings in Calgary were down 3% on a month-over-month and year-over-year basis and good-quality, newly listed homes didn’t stay on the market for long, with a 71% sales-to-listing ratio in January.
Calgary led the country in rising prices, said CREA.
“Year-over-year price growth in the MLS Home Price Index (HPI) was mixed across housing markets tracked by the index,” said CREA. “Calgary (at) 8.98% and Greater Toronto (at) 7.06% again posted the biggest price gains.”
According to CREA, Calgary’s HPI in January was 197.9, with 2005 as the benchmark year of 100, meaning prices in Calgary have almost doubled in eight years.
Trying to put the finger on what is driving the Calgary market is akin to the movie Groundhog Day in which the protagonist lives the same day over and over again.
The Calgary market is hot because the same factors that raised the heat in 2013 are still in play: Near-record breaking net migration and a rental vacancy rate that averages 1% city wide, resulting in rents in some areas that equal mortgage payments.
There are, however, significant changes occurring in Calgary’s rental sector.
At least one, and soon two, rental-specific apartment towers are rumoured to be on the verge of opening and one out-of-town condominium developer is marketing directly to investors, who would turn their units into rentals to meet the demand in the city, which may explain why Boardwalk REIT, the largest landlord in Calgary, is offering incentives, including free rent, to tenants to offset what it calls more supply and competition.
An increase in condominium-apartments and rental units is sure to be part of the Calgary real estate story this year.