An Altus Group report says new condominium sales in Calgary have jumped by 11.5 per cent so far this year compared with a year ago.
The new report said sales reached 2,555 units between January and September compared with 2,292 for the same period a year ago.
It said 4,327 new condo units were under construction at the end of September, up from 4,263 a year ago but starts were down to 1,537 from 2,780 last year.
Completed but unabsorbed units at the end of September was 131 compared with 232 last year.
“Demand for condominium units has increased this year, supported by a variety of factors,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “Many first-time homebuyers have made the move into homeownership this year with the purchase of a condominium unit. Condo units on average are priced lower compared to single-detached homes, making them an attractive option for many of these buyers.
“However, first-time homebuyers are not the only ones who have demanded condo units. Those looking to downsize, and move to a more maintenance-free lifestyle have also supported demand for condo units, as well as investors. The decline in the vacancy rate, and rising rents, has increased the incentive for investors to purchase units to rent out. Collectively, these factors have contributed to the rise in condo sales this year.”
He said sales in the resale market are forecast to rise this year and next. Employment levels in Calgary are anticipated to further rise in 2014, along with income. Positive net migration will also support housing activity in 2014.
Year-to-date until Thursday, according to the Calgary Real Estate Board, there have been 3,762 MLS condo apartment sales in the city’s resale housing market, up 15.19 per cent from a year ago with an average sale price of $299,725 and a median price of $262,000. Those prices have increased by 5.72 per cent and 4.54 per cent, respectively from last year.
There have been 2,990 condo townhouse sales, up 21.45 per cent from a year ago, with the average sale price rising by 7.69 per cent to $341,531 and the median price up 5.90 per cent to $305,000.
In contrast, the year-to-date average sale price for a single-family home in Calgary has climbed by 7.69 per cent to $517,383 and the median price has gone up by 8.46 per cent to $450,000.
Ann-Marie Lurie, chief economist with CREB, said affordability is playing a key role in the increased sales in Calgary’s condo market this year.
“It offers that niche that hasn’t been there certainly in the single-family. We’ve seen the availability in product in the single-family under a certain price range just start to disappear,” she said.
Another factor, she said, was the tight rental market in the city.
“A lot of people in the rental market tend to be first-time homebuyers. With the rental market being as tight as it is and expectations of rental rate increases further impacted by the flood a lot of them moved into homeownership sooner. And lot of them tend to go toward that more affordable product in the condo market,” added Lurie.