Condo assessments drop as house values rebound
A glut of condominiums in Calgary has helped drag down the assessed value of condos for 2018, even as single-family house values rebounded.
As the City of Calgary mailed out assessment notices to property owners Thursday, it announced that the median assessed value of a residential condominium for 2018 is $260,000, down from $270,000 a year earlier.
It’s the third straight year of decline in condo values since they reached an assessed median value of $290,000 in 2015.
While single-family homes also saw their assessments drop in 2016 and 2017 as the recession battered the provincial economy, the median value of stand-alone homes increased to $480,000 this year. Harvey Fairfield, the acting director of assessment for the city, attributed the continued decline in condo value in part to the number of units in the city when the market value of properties were evaluated on July 1, 2017.
“There’s certainly a lot of supply coming on stream and that would certainly be contributing to that,” he told reporters Thursday.
The Calgary Real Estate Board won’t comment on the city’s assessment process but says that significant construction of new condominium units is “placing downward pressure on pricing.”
“There’s a lot of supply, not just on the resell but on the new homes side as well,” said CREB chief economist Ann-Marie Lurie. “Because of that additional supply, it outpaced demand.”
Numbers provided by the city show 116,036 taxable residential condos in the city at the start of 2018, compared with 111,198 for 2017 and 108,016 for 2016.
Lurie said there were 1,700 condominium units on the market for resale in December, compared with around 800 on average for the same month in previous years.
She noted that much of the condo construction taking place has been planned for years and developers are likely looking to the long-term for their projects.
But there will not be a “quick turnaround” to the situation.
“Some of this additional supply is going to take some time to work through the markets,” said Lurie.
Fairfield said it’s too soon to say whether the trend will continue into the new year as Alberta’s economy continues to grow. “We will actually have a better idea on July 1, 2018, as to if that trend is continuing or not, at that particular point in time.”