Adversity in condo market to continue in 2018

If you're a condo owner in Calgary, you may be telling yourself that "what goes down must come up," but it's a fine line between thoughtful analysis and wishful thinking.

"The condo-apartment sector is still facing a lot of challenges," said CREB® chief economist Ann-Marie Lurie.

"While sales improved in 2017, it wasn't enough to keep pace with new listings, so we still had price declines."

2017 brought positive news for the new-home market, but there's still room to improve

Will 2018 bring good news or bad news for Calgary's new-home market? As with many aspects of the real estate market, it depends on your focus.

"Looking at Canada Mortgage and Housing Corp. data, we saw an improvement in starts in both the single- and multi-family sectors in 2017," said CREB® chief economist Ann-Marie Lurie.

Home buyer doesn't settle for less with her forever home

At 52, Leah Barber knows what she wants. The recently divorced mother of a university-aged son was clear on her must-haves when she began shopping for a new home.

Top priorities were a home with great curb appeal and a big deck adjoining the great room – a sunny spot where she could relax after a long day at work. Add to that a double master plan, so that when her son was home from school, he would have his own space. In addition, she had specific layout requests, including a smaller footprint – small enough to be low maintenance.

She found exactly what she was looking for in Hopewell's Xeno model — a 1,300 square foot, laned home with a double master plan and front kitchen in the southeast lake community of Mahogany.

CREB® chief economist Ann-Marie Lurie has seen a bit of everything in 2016. From buyers' conditions to migrational changes, Calgary's housing market has taken industry observers like herself on a wild ride over the past 12 months.

CREB®Now recently had the chance to sit down with Lurie and reflect on 2016. Here's what she had to say:

CREB®Now: Did 2016 play out the way you expected?

Homebuilders, developers cite international interest in region

Over the past four months, one-third of the 11 sales at the luxury Creekstone condo project in Canmore's Spring Creek development have been to foreign buyers.

And while there have been no purchasers from China — yet — developer Frank Kernick said it is "just a matter of time" before they come.

Housing experts urge buyers to consider all the options before building, buying 

For Jennifer Weisgerber and Ian Muller, both 25, buying – and building – their first home has been the most important decision of their lives.

Muller, who installs fire sprinklers, and Weisgerber, who works for a company that sells parts for road construction, rented a townhome in Okotoks for five years. Last January, they signed with Morrison Homes to build a 1,700-square-foot three-bedroom home in the southeast Calgary community of Auburn Bay.

Provincial decline led the country

Spending on new residential construction in Alberta totalled $738.3 million in April, down from the $1.025 billion seen the previous April, according to the latest numbers from Statistics Canada.

The 28 per cent decline was the largest fall of any of the provinces, with decreased investment occurring in all dwelling types – although the decline was mainly due to lower spending on single-family dwellings.

In total, spending on new housing construction decreased in five provinces in April. Alberta was followed by Saskatchewan and Manitoba.

Small-volume builders say they've been largely unaffected by the economy

Alberta's economic downturn is not impacting all areas of the housing industry in the same way, according to small-volume builders who say their niche is, in fact, busier than ever.

"We are pretty much unaffected by the economy," said Brian Cook of Cook Custom Homes, a Calgary-based micro-builder that designs and builds five homes per year. "There is still money in Calgary and those who work in economy-friendly industries are building homes."

Cook noted one of the only differences he's seeing is in buying strategy, especially with spec homes. When the market was hot, buyers would tour a home once and put in an offer.

Construction declines won't diminish market, says industry

Calgary's new housing market in 2016 will be characterized by a gradual slowdown, with highlights coming from first-time buyers, a resurgent luxury sector and continued multi-family growth, say industry insiders.

Canada Mortgage and Housing Corp. (CMHC) forecasts a 16 per cent decline in Calgary housing starts to 10,000 units, following a 23.9 per cent decline Calgary in 2015.
For single-family homes, that means only 4,000 starts this year — the lowest since 1988 – from 4,138 in 2015.

Multi-family starts are predicted to fall to 6,000 units from 8,895 last year.

Despite the slowdown, Canadian Home Builder's Association-Calgary president Wendy Jabusch believes Calgary's housing market will continue to remain healthy, especially as net-migration numbers to the city continue to be positive. The Conference Board of Canada forecasts levels will total 11,747 in 2016, compared with 14,951 in 2015.

Long-awaited development to house up to 800 units 

Over a decade in the making, Airdrie's controversial Midtown development is finally poised to take the next step and fill in yet another blank on the city's growing landscape.

Currently being actively graded, the 16-hectare Midtown lot along Eighth Avenue W. and bordered by MacKenzie Pointe to the north and Luxstone to the south is labelled for 600 to 800 residential units.

The plan calls for a maximum of 305 single-family lots, 115 townhouse units and more than 300 low- and medium-density lots.

The original Neighbourhood Structure Plan (NSP) was first adopted by Airdrie city council in 2009, but construction stalled through the original developers.