A recent report of Calgary’s multi-family real estate market found that new condominiums outperformed analyst expectations in 2013. The outlook report, put together by global real estate consultant Altus Group, suggests that strong demand for new condos reduced supply and increased prices.
Demand for new housing pushed new condo sales up 20 per cent in 2013 and increased prices by between $20,000 and $40,000. The report found that during the first half of 2013, the Calgary condo market was influenced by the region’s strong economy, employment opportunities, population growth and tight rental market.
Looking forward, Altus Group anticipates a continued trend in price growth. However, substantial increases like those seen between 2012 and 2013 are not likely to continue, as demand is expected to be met by new project launches and pending completions.
The state of the new condominium market was also influenced by the region’s summer flooding, which according to the report, “impacted a large number of homes in the inner-city, boosted demand for temporary housing and attracted many investors to acquire units in the inner-city and key suburban markets.” The report goes on to say that the flood’s impact will continue into 2014, resulting in a decline in sales.
The report lists other Calgary trends to keep an eye on in 2014, including:
- Mortgage rate increases affecting affordability
- Tightening of mortgage regulations
- Reduction in amortization periods
- Stricter lending criteria
- Restrictions on investor activity
- Increase in purpose-built rental supply
