Condos on a roll citywide … again
Growth in demand expected to drive construction and sales growth in 2012
Whether at or near the city’s core or in the suburbs, condominiums’ appeal is on a roll again. While the market slowed for a period during the economic downturn, consumers are now taking advantage of price adjustments, redesigned floor plans, good locations and still-very-affordable interest rates, driving townhouse and apartment construction and sales to surge ahead faster than expected.
In an earlier projection, Canada Mortgage and Housing Corp. called for work to start on about 3,900 multi-family housing units in and around Calgary this year — but that number has revised upward.
“While our 2012 numbers are still being finalized, I think 2012 multifamily activity will easily surpass 4,000 units,” says Richard Cho.
Cho, CMHC’S senior analyst for the Calgary market, says the condo market isn’t just an affordable option to singlefamily detached housing anymore — it’s a lifestyle choice being adopted by demographic groups stretching from young, single, first-time buyers to more mature repeat buyers.
For some, the decision to move to a smaller home can be tough to wrap one’s head around. But not so for David and Reanne Warren.
“With the kids gone, downsizing was an easy decision for us,” says Reanne. “We decided on a condo because we spend a lot of time from May to September at Pine Lake.”
Leaving their 1,700-square-foot home behind, the couple bought a much smaller condo in Prestwick Place by Cardel Lifestyles in southeast Calgary’s MCKenzie Towne community.
Their new lifestyle not only assured them the comfort of the lock-andleave scenario, but also reduced the amount of maintenance, including an end to cutting grass and moving snow.
And they didn’t waste much time making their decision.
“We didn’t look at anything else, because we were happy with what we found,” says Reanne, adding that the southeast location was also what they wanted.
Cardel Lifestyles’ president and partner Tim Logel says consumers are looking for value, location, design and builder reputation when they are shopping the market.
“I do expect that 2012 will have more customers out looking than we saw last year, as the market continues its modest improvement year over year and supply continues to moderate,” he says. He is forecasting 215 sales for this year. Doug Owens, general manager of Calgary multi-family housing for Brookfield Homes, sees a continuation of a strong fall 2011 market.
“With the strength that we saw in the fall market and the number of first-time home buyers shopping, we are expecting momentum to build significantly into the spring market,” he says. “Moreover, the unexpected strength of the fall market has significantly depleted our inventories of quick-possession homes across all projects with only a few remaining in Mosaic Cranston.”
CMHC is also calling for an increase in activity next year.
“Apartment inventories which had been elevated for the last couple of years and held back production, have started to move lower. This will provide builders an opportunity to increase construction in 2012,” says Cho.
In recent months, he adds, there has been an uptick in new apartment projects breaking ground and building permit numbers would suggest more are expected.
“The pricing for some projects and the location of others have been attracting buyers,” says Cho.
Streetside Development Corp., which builds townhouses and apartments in several areas of the city, is gearing up for a busier 2012. Company general manager Don Blair says Streetside will start three new projects this year.
“I expect we’ll be somewhat more aggressive than in 2011, partially due to increased demand as well as our new projects,” he says.
Homes by Avi, through its Avi Urban division, is readying for a strong year, according to Homes by Avi Alberta president Alice Mateyko.
“Because we have a number of Avi Urban projects set to launch this year, including The Block in the Beltline area, we are forecasting 163 sales,” she says.
As for the downtown highrise market, the Altus Group research firm is calling for a stronger year with all the projects coming out of the ground or being readied. The sales volume this year is expected to be more consistent, with fewer “blowout-type sales launches” but stronger overall sales growth, says Matthew Boukall, manager of residential consulting, services, and research for Altus.
“The market activity in the downtown is expected to continue to perform strongly with pending launches continuing to improve supply and attract buyers into the market,” he says.
Based on the number of proposed project launches and continued demand, Boukall is forecasting sales of 700 to 1,000 downtown, consistent with 2011’s volume.
“The suburban market is expected to continue to see the majority of the sales activity in 2012, particularly in the south where the pending hospital and ring road is expected to attract a disproportionate number of new consumers looking for affordable housing in the suburbs,” he adds.