Feb 18, 2011, Calgary new condo market showing signs of life

A year ago, the new condo market in Calgary was “mired in a slump” but today it’s “starting to show more life,” says a residential real estate report by the Altus Group.

The economic consulting firm said the success of the planned University City project at the Brentwood Village shopping centre shows that LRT stations offer potential opportunities for condominium apartment developers.

Last fall, the first two phases of the project – two 18-storey towers of 216 units each – sold out within a matter of days.

“The experience at University City demonstrates that transit-oriented development can attract buyers if the product is well designed and priced for the location,” said the Altus Group. “There should be opportunities for transit-oriented development in cities with existing and/or planned LRT lines.”

The report said condominium apartment sales in Calgary began to recover in 2010 reaching almost 1,500 units, up from about 600 in 2009.

“However, the pattern throughout the year was somewhat erratic – the year started out with strong sales in the first quarter, then waned for the next six months before picking up again in the fourth quarter, largely due to the opening of the first phases of University City,” said the report.

It said 15 buildings were launched in 2010, up from six in 2009.

“An impressive 62 per cent of the approximately 1,000 units released for sale in 2010 were sold by the end of the year, boosted by over 400 sales in University City. Only two other buildings launched earlier recorded more than 50 sales in Calgary in 2010.”

The Altus Group said about 1,800 of the total of about 6,300 units in active condominium projects remained unsold at the end of 2010 and those projects are split about equally between highrise and low-rise buildings.

“In Calgary, the market should continue to recover, but the strength of the recovery will depend in part on the ability of developers to offer attractively priced product in superior locations,” added the report.

In the resale market, the Calgary Real Estate Board said there were 5,181 MLS condo transactions in 2010, down 18.13 per cent from the 6,328 in 2009. The average sale price, though, rose by 2.1 per cent on an annual basis from $283,734 in 2009 to $289,697 in 2010.

The resale condo market continued its slow pace in January, according to CREB, with only 302 sales, off 19.68 per cent from the 376 sales in January 2010. The average price year-over-year jumped by 2.0 per cent to $288,291 from $282,639.

According to the website of realtor Mike Fotiou, of First Place Realty, there have been 281 condo MLS sales so far this month from Feb. 1-17 for an average sale price of $287,397. In February 2010, for the entire month, the average sale price was $282,880 on 536 transactions.

By Mario Toneguzzi, Calgary Herald