TOWNHOMES A GROWING CHOICE
Buyers get some benefits of a single-family home without the costs of a detached house
A new report shows townhouses are an increasingly popular option for would-be buyers in Calgary with sales growth leading other major centres like Vancouver, Toronto and even Edmonton.
“A townhouse in Calgary fits a great role in between single-family, detached housing and apartment options,” said Matthew Boukall, vice-president of product management for data solutions at Altus Group. “You still get the benefits of a single-family home … a front door … storage space and perhaps an attached garage.”
What you don’t get is the cost of the detached home.
Discussing the consulting firm’s findings in its monthly report on real estate in Canada, Boukall added townhouses are the compromise option, particularly for young families seeking a singlefamily detached home but who cannot afford the $470,000 median price ( based on Calgary Real Estate Board data).
The report, which examined the market across the four major urban centres, found sales in Toronto and Vancouver have fallen off while Calgary has seen sales surge.
During the first half of the year, sales stood at 639 units compared with 422 in the first half of 2017. The roughly 33 per cent increase stands in contrast to Toronto, which saw sales drop by about 285 per cent in the first half of 2018 compared with the same period in 2017.
Driving growth in Calgary is affordability.
“If you look at the two largest markets — Vancouver and Toronto — townhouses are materially more expensive,” he said, adding the average price in Toronto is more than $800,000. “Townhouses, for us, are affordable products, whereas in those markets the apartment product is the only affordable housing option.”
On a cost-per-square-foot basis, the report found in Calgary a new townhouse’s asking price was $275 whereas in Vancouver the cost per square foot was $575 and Toronto was $400.
Moreover Calgary prices are generally lower because their square footage is less than other markets. Consider Toronto where the average footprint is 2,100 square feet. In contrast, Calgary had the smallest footprint among the four cities at 1,300 square feet.
“Townhouses are still quite a bit more expensive than apartments here, but you’re getting a little bit more with it.”
According to Altus’s own market data, the average price for a townhouse in Calgary is about $325,000, while a two-bedroom apartment condominium unit is about $250,000, he added.
“It’s just a townhouse might be the more appealing option to buyers if they start off looking for a single-family house,” he said. “A townhouse is a pretty close approximation — you still get all that single-family style build form.”
Another factor driving growth in Calgary is that the economy is recovering from a downturn. Prices are starting from a lower point, making the housing type more accessible.
Additionally, Boukall noted townhouses are increasingly on the radar than in past years because of tighter borrowing conditions.
“It’s both higher interest rates making detached housing more expensive to own and mortgage rules where you have to qualify at the posted five-year fixed interest rate,” he said.
What’s more is the city is seeing an influx of new townhome building starts with 18 projects launched this year to date.
“It’s been the growth areas in the south, especially in Seton, and in the north-central corridor like Livingston, Nolan Hill and Sage Hill that have been seeing lots of activity,” he said.
“For a lot of first-time buyers, it appears a townhouse may be a more logical option.”