Vacancy rates spike as downturn makes its presence felt

Calgary's commercial sector has not been spared from prevalent weakness in the provincial economy, with prime spaces in the city left empty for most of 2015.

Vacancy rates in Calgary's commercial office sector increased by 5.8 per cent from the beginning of the year to the end, noted commercial real estate firm Avison Young. In downtown specifically, vacancy jumped 7.2 per cent, which accounted for approximately three million square feet.

In comparison, office vacancy rates tripled from four to nearly 12 per cent during the last economic downturn in 2008/09.

28.7%: In February, condo apartment sales increased 28.7 per cent over January

10: The Provincial government promises 10 new schools for Calgary suburbs

28,017: Net migration to Calgary in 2014, according to the 2014 Civic Census, was 28,017 additional residents

2,242: Auburn Bay saw the most additional residents with 2,242 according to the Civic Census

Low vacancy rates, high absorption rates in the resale condo sectors and dwindling supply in the single-family market vaulted secondary suites into the spotlight in 2014.

The issue culminated in mid-December with an 8-7 vote by city council against approval reforms – which prompted Mayor Naheed Nenshi to declare he'd leave the room during future secondary suites debates until it came time to vote. Ward 7 Coun. Druh Farrell likened the entire process to "giving birth to a chair."

The latest framework would have established a discretionary development permit process for suites where they were currently not allowed, as well as furthered public consultation with Calgarians to fully develop regulations moving forward.

Calgary's tight rental market, combined with low mortgage rates and relative affordability, supported record growth in the city's resale condominium sector in 2014.

Combined condo (apartment and townhome) sales up to the end of November increased 19 per cent to 8,105 units, compared with 6,782 units during the same period the year prior, according to CREB®.

The all-time sales record for condo sales was set in 2006, when 8,390 homes changed hands.

"In addition to lifestyle preferences, condominiums appeal to those looking for more affordable ownership options," said CREB® chief economist Ann-Marie Lurie, who originally forecasted 7,641 combined condo sales in 2014.

Despite declining oil prices, city sees record in-migration, condo sales

You could almost say 2014 was a banner year for Calgary.

Almost.

The city welcomed a record number of newcomers, with the addition of 38,508 residents elevating the total population to almost 1.2 million.

Sales activity in the condo sector came close to, and might have even broken, records.

And the long-awaited Bill 9 Condominium Act passed, providing more protection for condo owners.

"It was a good year," said Mayor Naheed Nenshi. "Now, toward the very end of the year, we're certainly starting to see some economic headwinds."