Condo prices to reach new heights
Report predicts steady increases for several years
Mario Toneguzzi Calgary Herald Wednesday, January 31, 2007
Strong demand will drive steady price increases in the Calgary and Edmonton condominium real estate markets through the rest of the decade, says a national report released Tuesday. Genworth Financial Canada's Metropolitan Condominium Outlook report forecasts Calgary condo price growth to average 12.3 per cent in 2007 then 4.5 per cent annually through to 2010. The report says Edmonton will average 18.3 per cent this year and 4.1 per cent annually to 2010. The average price of a Calgary condo is forecast to rise from $262,456 in 2006 to $335,885 in 2010 while in Edmonton the average price of a condo is forecast to increase from $180,367 in 2006 to $240,875.
Looking at the future, the report says Calgary will be just behind Vancouver ($349,409 in 2010) in the country for average condo prices.
The report doesn't surprise Calgary Real Estate Board president Ron Stanners, who earlier this month released the board's 2007 forecast, saying condo prices in the city will rise by nine per cent this year and total sales will increase by three per cent. "One of the things is affordability," said Stanners of the growing interest in the condo market here, "but it's also a lifestyle thing. There's a lot of young people who prefer to buy a condo. There's a lot of first-time buyers that are actually looking for condos. They're not interested in the single family. Their lifestyle is such that they're not going there.
"There's always, of course, empty-nesters and seniors that are moving that way as well because of lifestyle. I think (the report's) numbers are fairly accurate. The difference between nine and 12 is not that much." Stanners predicted the condo market will become an increasing choice of housing for people in Calgary in the next few years as more become empty-nesters and seniors who "just don't want to look after the house anymore, cut the grass and shovel the walk." "It's becoming an accepted lifestyle," said Stanners. "If we go back a few years, you're sort of buying a condo because you can't afford a house whereas people today are saying 'No, no, this is what I want. This is the lifestyle I want. It suits my life.' "
Lai Sing Louie, senior market analyst at Canada Mortgage and Housing Corp. in Calgary, said the agency is forecasting average price growth in Calgary's condo market to be about 10 per cent this year. "There's just a strong demand for housing here in Calgary," said Louie. "Looking at the month of January -- it hasn't gone through completely -- but there's a tremendous demand right now for housing in Calgary. It may even go to a record high for January. That's how strong it is. The month's not over, yet, but it's way up. It's around 2,300 sales now. That's high. . . . At first we thought the prices would back it off a bit, but it isn't happening. "With condos, for someone looking for a place, lots of first-time buyers are not going to be able to move into a single-detached home, so the whole flow of people moving from the rental market or first-time buyers is really at the condo market now."
Total residential combined sales (single family, condo and mobile home) for January 2006 was 2,408. According to the Calgary Real Estate Board, the average sale price of a Calgary single-family home rose by 38.29 per cent in 2006 from the previous year's average of $278,393. The average sale price of a Calgary condo rose by 41.91 per cent in 2006 from 2005's average of $183,714. In its 2007 forecast, the real estate board said Calgarians in the market to buy a new home this year will increasingly turn to condominiums as an alternative to single-family homes. The organization said the single-family average sale price will hit $411,948 this year, while the average sale price for condos in 2007 will rise to $284,175.
The latest statistics from CREB show the average sale price of a single-family home in December was $396,870, while the average sale price of a condo was $281,459 in the month. Last year, condos represented 27.42 per cent of residential sales in Calgary and that number, according to the real estate board, is expected to increase to 30.85 per cent this year. The Genworth report reviewed new and resale condo markets in Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver based on data from the Conference Board of Canada. New condo prices were not included. The study looked at all existing condominium types in Calgary and Edmonton while surveying only condominium apartments in Vancouver, Toronto, Ottawa and Montreal. In percentage terms, Edmonton is forecast to have the strongest growth in condo prices from 2006 to 2010 with prices rising 33.5 per cent followed by Calgary (28 per cent), Vancouver (20.8 per cent), Montreal (17.8 per cent), Toronto (16.8 per cent) and Ottawa (16.5 per cent).
mtoneguzzi@theherald.canwest.com
© The Calgary Herald 2007