Semi-detached homes market sees rising demand
You could say Calgary buyers are halving their expectations for their choice of home these days.
More buyers are looking to purchase semi-detached homes — a half duplex — in the city as the cost of single-family detached homes becomes increasingly pricey.
“When you look at the inner city communities, it's pretty hard to afford a detached home, and that's where semi-detached homes become appealing due to their lower price tag,” says Ann-marie Lurie, chief economist with the Calgary Real Estate Board. January statistics from CREB show the benchmark price for a single-family detached home in Calgary was $702,200, up nearly 13 per cent from the same month last year.
The semi-detached benchmark price was not far behind at $625,000, up about 11 per cent year over year.
Some semi-detached homes on the market are what many may imagine as a “traditional” duplex — a dated building yet still in high demand because of a slightly lower price point.
These homes often are attractive to investors seeking to rent them, says Jared Chamberlain, Calgary realtor with the Chamberlain Group.
“Others are infills, and they have been selling for less than a million dollars in many areas of Calgary.”
While the price for new build infill is higher than the benchmark, these homes are still more affordable than an infill detached home that often sells for $1 million or more, he adds.
“(Semi-detached) buyers are usually inner-city folks who can't afford detached homes and don't mind sharing a wall,” Chamberlain says. “For buyers that can't afford the inner city, and don't want to share a wall with their neighbour, they start looking elsewhere in the city towards the suburbs.”
A major challenge for buyers in the semi-detached market is simply finding one to purchase. It's by far the segment with the smallest supply in the city. In January, the city had 223 new listings for semi-detached versus the next lowest, row with 322 listings.
“A lot of people would choose this option if they could,” Lurie says. “We've seen price growth in semis quite a bit as of late due to demand.”
Still, in January, the sales-tonew-listing ratio for semi-detached was 59 per cent, just below the threshold (60 per cent and higher) to qualify as a market favouring sellers.
By contrast, apartment, single-family detached and row are all segments where conditions decidedly favour sellers.
“I don't put a lot of stock in January numbers that typically see less activity than other months, but we did see a pick-up on new listings,” Lurie says, noting listings of semi-detached homes increased 49 per cent year over year, the most among all housing types.
Calgary is likely to see more semi-detached supply over the next few years. Builders are increasingly constructing semi-detached homes along with more row and apartment, Lurie says.
“Densification has been a trend for a few years.”
Canada Mortgage and Housing Corp. statistics from 2023 show more semi-detached starts compared with 2022 (1,674 versus 1,560).
That said, activity is still far below starts for other types.
CMHC statistics show, for example, 5,875 starts for single-family detached home starts last year — although up by just 23 starts from 2022.
“Last year, there was a lot more row activity,” Lurie says, pointing to CMHC statistics showing 2,407 starts in 2023 versus 1,543 in 2022.
Overall, a lack of supply for semi-detached is likely to continue as demand remains high from buyers for the smallest of all housing segments in the city, and that is likely to keep prices elevated, Lurie adds.
“There just aren't a lot of options.”