LIVING DOWNTOWN
Living downtown remains a preference for many residents, says Richard White.
New condo boom hits the city
If you are like me, you may well have been asking yourself, “Why are developers still building more city centre residential towers when downtown employment is down, as the demand for living near downtown must be in decline?”
EXPERT ADVICE
I thought it best to consult with someone who understands the dynamics of residential development in Calgary better than me. This led me to Urban Analytics, a company specializing in maintaining data on current multi-family development projects in Calgary, Edmonton and Vancouver (and available to industry stakeholders on a subscription basis).
Kimberly Poffenroth, vicepresident of business development, shared some of its data on the 186 actively selling multifamily projects the company tracks across the city.
Andie Daggett, market and rental data analyst (Alberta), says Calgary’s rental market has remained strong throughout 2018 with 95 per cent occupancy in the third quarter of the year.
“The new mortgage rules that came into play at the beginning of 2018 helped drive some success in the rental market, as many potential purchasers failed to qualify for a mortgage,” Daggett says. “This, in combination with the increasing number of amenities offered at new rental products, plus rental incentives offered at a majority of rental projects, helped maintain a strong new rental market across the city throughout 2018. And, as a result, new rental product in Calgary has been able to increase the average net rent per square foot while maintaining low vacancy rates.”
Poffenroth notes there are economic reasons for renting rather than owning.
“I don’t believe the end goal for most Calgarians is to rent forever,” she says. “They want to buy a condo or a home. However, the new mortgage rules may push potential purchasers to rent for longer than they originally anticipated. Condo developers have responded appropriately to the changes in the current market conditions through launching price-sensitive product that allows purchasers to obtain home ownership at a more affordable price. There have also been a number of successful higher-end projects, appealing largely to a downsizer crowd, which have continued to show signs of success.”
Indeed, the 2018 Calgary survey, Calgary Growth Perspectives Tracking Study, by ThinkHQ Public Affairs, found 79 per cent of Calgary renters say that if it were feasible, they would like to own their own home.
RENTAL VERSUS CONDO
It is important to understand both the condo and rental markets, as the two are closely linked when it comes to multi-family residential development.
The “waters are muddied” when you add in the fact that over the past few years, some condo developers have converted their unsold units into rental units for the time being. In addition, many condo buyers are investors who rent their units. It is not uncommon for a new condo building to have as many as 25 per cent of its units for rent.
Another factor linking rental and condo developments is that today’s renter could well become tomorrow’s buyer. I often say empty nesters and young professionals should rent before they buy to determine how much space they really need and if they like the urban lifestyle. Renting also allows you to test drive the community to determine if it has what you want, as Inglewood is not the Beltline, and Bridgeland is not Kensington.
NEW CONDOS, GOOD NEWS
For the first time in three years, new condo projects have been announced in the city centre.
Nude by Battistella is a 177-unit development in west Beltline that began selling units in September and has sold 35 units to date. Its funky Ink condo in East Village is now complete and purchasers have moved in. It has only 10 units left to sell.
Arlington Street Investments started to market the Fifth, its 48-unit condo at the corner of 17th Avenue and 5th Street S.W. this fall. This is the beginning of CEO Frank Lonardelli’s vision of converting 17th Avenue into a vibrant high street with a mix of new retail, restaurant and residential developments.
And just a few blocks away in Mission, Boulevard Investment Corp. has launched sales of its 67-unit Matrix condo. Also, in Mission, Bowman Developments has sold 20 per cent of units in its recently announced 82-unit condo, the Nest.
CITY CENTRE HOT SPOTS
In Kensington, the Annex by Minto “accounted for 42 per cent of all concrete condominium sales in the inner northwest submarket in the third quarter,” says Urban Analytic’s 2018 third quarter report.
Cidex is full steam ahead with its West Village Towers. The first of the three towers is rising out of the ground at 9th Avenue and 11th Street S.W. And, just across the tracks, Inter Gulf has started construction of the first of two towers at the corner of 11th and 11th. As well, Hines’ Block 500 project is moving forward on 12th Avenue S.W., while One Properties began site work for the construction of its three-tower Curtis Block project further east in the Beltline. All of these are rental projects.
Qualex Landmark’s first tower (289 units) of its upscale twin tower Park Point project across from Memorial Park was completed in 2018 and homeowners have moved in. Only 25 units are left to sell.
CITYWIDE HOT SPOTS
The new northwest inner-city community University District (by University of Calgary’s West Campus Development Trust) has been a huge success to date.
As of the end of November, 128 residents have moved into Brookfield Residential’s Ivy and Truman’s Noble projects.
It was also a busy year for new starts — Maple by Truman (independent living for seniors), Rhapsody by Gracorp (rentals with Save- On Foods and 10 retail units), August by Avi Urban ( just broke ground) and the Brenda Strafford Foundation’s assisted and long-term care building.
As well, University District has a call for proposals for two mixed-use blocks across from the Cineplex complex. In all, 800 multi-family homes are currently at various stages of construction in University District.
Westman Village in Mahogany has also been very well received. This unique, resort-style community that opened its first phase this year already has more than 230 residents. This number will grow to more than 1,200 people when all 860 residences are completed.
However, the area that is really booming is Calgary’s northern communities.
Urban Analytics’ third quarter report notes that “102 of the 182 actively selling multi-family developments in Calgary, i.e. 56 per cent, are located in the Inner North and Outer North submarkets and that these two markets accounted for nearly 70 per cent of all Q3 sales of new multi-family in Calgary.” That is impressive.
LAST WORD
It would appear there is a lotto be optimistic about when it comes to the living near downtown. The 2018 census showed the Beltline was Calgary’s fastest-growing community with 1,668 new residents over the past year. Downtown West and Eau Claire also showed healthy growth with all communities surrounding downtown experiencing some growth.
So, while downtown is struggling as a place to work, its surrounding communities are continuing to bloom (not boom) as places to live. It is also interesting to note how Calgary’s “northern communities” are leading the way when it comes to urban densification.