Wherever you look, there seems to be a new condo project popping up – from the downtown core all the way to the burbs. Cranes and cement trucks seem to slow traffic down in almost every quadrant of the city. But are there actually buyers for all these units and who are they? What about resale? How are they being affected? And why would builders want to build in this economy?
We must first understand that there are many different types of buyers. There are the first-time homebuyers, young downtown professionals, families and empty nesters, just to name a few.
Some buyers want the convenience of maintenance-free living in the downtown core, where they can walk to work and also be in close proximity to trendy restaurants, and others want to get as far away from the downtown core as possible, seeking family-oriented multi-family communities that offer lakeside living or a quick getaway to the mountains. There are numerous projects currently underway that fit many moulds – from Melcor Development’s Greenwich in northwest Calgary, to Jayman BUILT’s Westman Village in Mahogany, to the many new builds in Calgary’s beltline district, the choices are endless.
The East Village, a neighbourhood once in a state of neglect, is now a hip locale where people can eat, drink and live. Clare LePan, marketing and communications director for Calgary Municipal Land Corporation (CMLC), says their organization was formed in 2007 with the City of Calgary as the single shareholder. The mandate: to revitalize the Rivers District – home to East Village.
“In 2009,” says LePan, “CMLC released the master plan vision for East Village and fast forward to today, we are 10 years through the delivery of that master plan. To date, CMLC has invested over $357 million in infrastructure and placemaking programs in East Village to help realize the master plan. This investment has in turn attracted nearly $3 billion in private investment into the community. Our investment has taken the shape of public spaces like RiverWalk, St. Patrick’s Island and Bridge, streetscapes and pedestrian sidewalks along with the New Central Library.”
LePan confirms that their developer partners are well underway with residential condominium projects. To date, four new condominium buildings have been completed and welcomed new residents with two more anticipated to be completed this fall.
“Over the past four years, we’ve welcomed nearly 2,000 new residents into the community which has really added to the vibrancy and appeal of East Village. New retail businesses continue to open in the community and have created East Village as not only a residential community but a destination for all Calgarians to visit.”
And despite the economy, builders are confident in building for the future. Projects are not being built for immediate possession; they are being built with projected completion dates down the road. Developers today have better financing than in the past and have a more sophisticated way of analyzing current and future markets.
Ryan Bosa, president of Bosa Development, says, “We recognized East Village’s potential when it was just a vision of a vibrant, walkable community designed for people to ‘live, work and play’ within proximity. We have a strong attachment to the community, and following the success of Evolution, our first two-phased project in the neighbourhood, we are proud to build Arris, a landmark project at the gateway to downtown.
“We know there is a strong connection between amenities and the well-being of residents, and with Arris, we are thrilled to be able to offer numerous amenities within the building, as well as many daily retail options with no need to cross a street. When complete, the two impressive residential towers at Arris will have more than 500 homes. They will be one of a kind.”
When it comes to the resale market, local Realtor Tanya Eklund says, “Calgary’s multi-family market is proving to be difficult this year. With all the new development hitting the market and more to follow, it leaves one thinking “what’s in store for Calgary’s multi-family?”
As new builds continue to go up in all quadrants of the city, Eklund says she has seen resale condo sales come to a screeching halt. “Pricing is key and, oftentimes, sellers are not prepared to list their condos at what it will take to sell.”
MLS apartment-style condo sales are down 14.8 per cent year-to-date over last year and inventory levels up 6.46 per cent year-to-date over the same time frame. “We need to see a higher demand, which may be difficult considering the interest rate hikes, the mortgage stress test implemented this year and low migration into the city. We also see sellers who cannot sell for what they need to and turning to the rental market which, in turn, is increasing the amount of rental doors coming to the market.”
Richard Cho with Canada Mortgage and Housing Corporation confirms, “After reaching a record high in December, new apartment inventories in Calgary have been declining. However, despite the decline, apartment inventories continue to remain well above historical averages. This has contributed to some imbalances in the housing market.”