Condo market holding steady, report finds

The pace of sales in Calgary’s multi-family segment continues to plug along and likely will continue to do so for the foreseeable future, based on the findings of a recent report examining the city ’s condominium market.

Third-quarter sales data for new condominium builds was down 12 per cent in the third quarter of the 2018 from previous quarter, found a report released last month by Urban Analytics.

Yet the news wasn’t all bad, says Kimberly Poffenroth, vice-president of business development with Urban Analytics.

“The third quarter was slow, but when you look year over year, the number was pretty much the same at the previous year,” she says. “That’s a good sign.”

The numbers reflect seasonal sales patterns for sales, she adds. Typically fewer buyers are in the market in the summer compared with the spring.

And the fact that the numbers are in line with the same quarter for 2017 suggest the market is stabilizing.

Given the higher mortgage rates, the numbers could have been worse, she adds.

Another reason for optimism in 2019 is the return of development to downtown, most notably a concrete multi-family project called Nude, by Battistella Developments, which launched last the summer.

“It’s done quite well (for sales), so that’s a positive,” Poffenroth says. “And it is interesting to see product selling in the downtown because for the most part it hasn’t seen a lot activity in the last few years.”

Most of the development has occurred, and still does, on the city’s new suburbs where wood-frame builds dominate and appeal to price-conscious buyers.

Of note for home hunters is that there is ample selection in this area of the marketplace.

Yet while inventories remain high, third-quarter numbers point to the number of available units having fallen somewhat.

“We are seeing standing inventory decrease for the move-in ready units,” Poffenroth says.

“And it’s always a good sign to see those numbers go down because it creates room for more new product.”

She adds it remains unclear what is in store for the multi-family market going forward, especially after oil prices took a dive in October, sending chills through the city’s economy.

Still, Poffenroth forecasts the main headwind for 2018 — rising interest rates — should be less challenging in 2019 for would-be

Now with time to readjust a little bit, I anticipate more buyers will be ready to qualify, potentially leading to a stronger market.

buyers.

“I think for the most part people had been grappling in 2018 with the higher mortgage rates and qualifying criteria,” she says.

“Now with time to readjust a little bit, I anticipate more buyers will be ready to qualify, potentially leading to a stronger market in 2019.”

What’s more is developers have also adjusted to the new reality.

“We’re finding that because of market conditions, they are more thoughtful with their projects, now aimed at more targeted demographics,” she says. “As such, projects coming onto the market in the new year are very well thought out, and they likely should be successful.”