Calgary Condo Market Thriving

Condos continue to be a big draw for Calgary buyers. According to the latest numbers from CREB®, Resale totals for condo apartments grew to 276 deals last month, up 17 per cent from 236 last year, with sales in both apartment and townhouse condos increasing last month compared to the same time in 2011.

Demand for condos in the Calgary market comes in stark contrast to Toronto, where condo sales plunged 20.5 per cent in the third quarter of the year, despite a 6.5 per cent rise in new listings. By the end of the third quarter condominium apartment sales in Calgary totaled 2,759, a 10 per cent increase over the previous year. Sales activity in the city has generally outpaced the level of new listings, helping reduce total inventory levels.

In a recent report from BMO, economist Robert Kavcic singled out the Calgary market as Canada's top performer.

"Activity is improving thanks to rising demand (strong population and income growth) and a gradual draw down of the excess supply put up during the prior (2005-07) boom," said Kavcic in report from the bank. "Prices measured by the MLS® Home Price Index (HPI) were up 6.5 per cent year-over-year in August, and have regained about half of the declines seen during the recession, and conditions are on the cusp of a sellers' market."

Kavcic continued by noting the relative affordability in the Calgary market, pointing out that average home prices in the city are "little more than four times median income" compared to 6.5 times in Toronto and 10 times in Vancouver.

Offering even more affordability for those looking to enter the housing market for the first time, the benchmark prices for an apartment and townhome-style Calgary condos in September sat at $249,300 and $277,700, respectively. In comparison, the benchmark price of an apartment-style condo in Vancouver in September was $368,600.

A benchmark home price is estimated using the MLS® HPI model, and are based solely on the specific attributes of a benchmark home. Because of that, it is more restrictive than the index, which is based on a broader set of properties in each housing category.

In addition to the number of condos that changed hands during the year, builders have also been busy adding more choices prospective buyers. Residential building permits were up in September for townhomes and apartments in Calgary, a reflection of the demand in the sector.

"New home construction in Calgary remained elevated in September, with gains reported in both the single-detached and multi-family sectors," said Richard Cho, CMHC's Senior Market Analyst for Calgary. "Multifamily starts have reported the strongest increase to date, due largely to gains in apartment construction."

Multi-family starts, which include semi-detached units, rows and apartments, totaled 471 units in September, up 20 per cent from a year earlier. Year-to-date, builders started 5,523 multi-family units compared to 2,468 units during the same period in 2011.