Wheels in mo­tion in Cal­gary real es­tate

Calgary Sun - Homes - - Homes - Myke Thomas CALGARYSUN

The 2019 Emerg­ing Trends in Real Es­tate re­port takes a look at trends ex­pected in 10 Cana­dian cities. Here is the re­port’s take on Cal­gary’s res­i­den­tial, com­mer­cial and in­dus­trial real es­tate sec­tors.

The Con­fer­ence Board of Canada ex­pects Cal­gary’s econ­omy to grow 2.3 per­cent in 2019 af­ter hit­ting 2.9 per­cent GDP growth in 2018. Now that the city is see­ing in­creased con­fi­dence as the oil and gas mar­ket starts its re­cov­ery, the wheels are in mo­tion in the real es­tate mar­ket.

Even with in­creased in­ter­est rates and new mort­gage rules, first-time and move-up home buy­ers are lead­ing the res­i­den­tial charge in mul­ti­fam­ily residences and luxury homes, re­spec­tively.

Mean­while, mil­len­ni­als and younger cou­ples are bal­anc­ing the condo mar­ket. For ex­am­ple, the East Vil­lage is a new city-sup­ported com­mu­nity devel­op­ment, with condo and ren­tal ac­com­mo­da­tions along­side re­tail and other cul­tural ameni­ties.

But Cal­gary’s hous­ing mar­ket re­mains broadly over­sup­plied. Ren­tal va­cancy rates peaked at seven per­cent in 2016 and have grad­u­ally im­proved since then to the six per­cent range, ac­cord­ing to the Canada Mort­gage and Hous­ing Corp.

The city’s of­fice mar­ket re­mains over­sup­plied, as many ten­ants take ad­van­tage of the 23.8 per­cent Q2 2018 va­cancy rate to move into Class A space. Down­town Class B and C as­sets have ex­pe­ri­enced the largest de­creases in oc­cu­pancy. There’s a flight to qual­ity in of­fice, so land­lords need to get cre­ative and are fo­cused on de­vel­op­ing unique, col­lab­o­ra­tive spa­ces tar­geted at mil­len­ni­als, star­tups and tech firms. For ex­am­ple, an older of­fice build­ing has been re­de­vel­oped as a dog-friendly of­fice tower fo­cused on at­tract­ing mil­len­nial busi­nesses. Its unique life­style perks in­clude a bas­ket­ball court, a putting green, a dog spa and an out­door dog park.

Cal­gary’s in­dus­trial mar­ket con­tin­ues to gain mo­men­tum, show­ing pos­i­tive ab­sorp­tion in 2018. But the re­gion re­mains cau­tious, fo­cused more on last-mile ware­hous­ing and ful­fill­ment fa­cil­i­ties and less on in­dus­trial.

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