Vancouver Developer 'Bullish' on Calgary Luxury Condo Market

 

Rendering of The Concord condo development in Eau Claire .

Supplied Ted Rhodes / Calgary Herald

 

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: April 20, 2015
Last Updated: April 20, 2015 9:10 AM MDT

The Vancouver-based developer of a luxury condo tower in Eau Claire remains “bullish” about the market despite the volatility in the energy sector in the first part of 2015 and a new condo report suggesting overall sales will fall this year.
Grant Murray, vice-president of sales for Concord Pacific, which is building The Concord luxury condo complex in Eau Claire, said the first phase of the project has sold 50 per cent of its 105 residential units.
Recently, the project held a ground-breaking ceremony which sparked more interest in the development.
“We’re absolutely bullish. . . . I don’t see any downturn from our perspective in this price range… The people that we’re appealing to in this market are not affected by any kind of downturn or swing. They’re looking long-term. they’re looking for lifestyle,” Murray said.
In 2014, a condo in the tower sold for $7 million, the fourth most expensive condo sale ever in the city, but the highest ever on a cost per square foot basis.
Concord Pacific is planning to build 218 luxury homes in two towers, including a $13-million penthouse, at 6th Street and 1st Avenue S.W. near the Peace Bridge. The Concord’s 105-suite West Tower will be 14 storeys with construction expected to start in March 2015 and completion by the fall of 2017. The East Tower will be 17 storeys with 113 units. It will be completed six months to a year following the first tower.
Calgary’s new condo apartment market can expect fewer sales this year, given the softer economic conditions and weaker in-migration, but they will still be above 2008/2009 levels, says a housing market report by the Altus Group.
The Altus Group report said 3,500 new condo apartment sales took place in the city in 2014 consisting of 2,300 low-rise units and 1,200 high-rise. That’s up from 3,400 in 2013 with 1,900 low-rise sales and 1,500 high-rise.
“There were 1,900 unsold units in condominium apartment projects in Calgary at the end of 2014 — or about one-fifth of the total units in projects being actively marketed,” said the report.
“The split was roughly equal between high-rise and low-rise projects. Virtually all of the unsold units are in projects under construction or pre-construction phases – less than 100 units are in projects that are completed.”
In the resale housing market, according to the Calgary Real Estate Board, there were 673 condo apartment sales in the first quarter of 2015 which was down 37.4 per cent compared with the same period in 2014. The average sale price has also dipped by 3.18 per cent.
mtoneguzzi@calgaryherald.com

Calgary Repeat Home Sales See Price Growth in March

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: April 14, 2015
Last Updated: April 14, 2015 8:32 AM MDT

 

Despite a gloomy picture being painted these days for Calgary’s resale housing market, a new report released Tuesday indicates prices for repeat home sales were up year-over-year in March.
The Teranet-National Bank National Composite House Price Index, said prices in the city rose by 0.2 per cent from the previous month and increased by 4.4 per cent from a year ago.
However, in his report, Marc Pinsonneault, senior economist with the National Bank of Canada, said prices in Calgary were down 2.1 per cent from their peak in October 2014.
The index is estimated by tracking ob­served or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.
The index found that nationally, of 11 markets surveyed, prices rose by 0.3 per cent month-over-month and by 4.7 per cent year-over-year.

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It was the third consecutive monthly increase and equal to the average March rise since 2010, said Pinsonneault.
“Prices were up in eight of the 11 metropolitan markets surveyed, the broadest diffusion in seven months. The composite index is now at an all-time high,” he said.
The annual hike from February came after four consecutive decelerations, said the report.
In a recent report, the Calgary Real Estate Board said MLS sales in the city dropped by 28.17 per cent in March from a year ago to 1,782 transactions.
The benchmark price, which CREB says represents typical properties sold, rose by 3.82 per cent to $454,300.
However, the median price dropped by 2.33 per cent to $420,000 and the average sale price was down by 2.19 per cent to $474,251.
“In this market, buyers and sellers should be thinking about their short-term and long-term objectives,” said Corinne Lyall, CREB’s president, in a statement. “This is a challenging economic time and people need to know their long game, so they can make the right real estate choices for today and tomorrow.
“Market influence is always wide-ranging and everyone has different reasons for making a move. Consideration must be given to the amount of inventory that’s available for a similar property based on the specific features of that home. The amount of competition for a property is often what influences the price that buyers and sellers will agree on.”
At the end of March, active MLS listings in Calgary of 5,693 were up 83.65 per cent from a year ago.

Boomers Drive Real Estate Market for Luxury Housing

 

TAMSIN McMAHON - REAL ESTATE REPORTER

The Globe and Mail

Published Wednesday, Apr. 08 2015, 12:00 AM EDT
Last updated Wednesday, Apr. 08 2015, 12:00 AM EDT

 

Canada’s luxury housing market is in the midst of a striking transfer of wealth, as baby boomers trade up for bigger houses while pouring huge sums into real estate for their children.
“I don’t think you’ve ever had nearly as much help from one generation to the next in buying homes,” said Ross McCredie, CEO of Sotheby’s International Realty Canada, which issued a new report examining the finances and buying habits of different generations of buyers in the “luxury” market, which generally refers to the higher end of real estate markets across Canada.

Among the more surprising generational trends is that far from downsizing to smaller condos as they age, wealthy boomers are increasingly looking to upsize into luxury homes, often because they still have adult children living at home. Empty-nesters are more likely to “right-size” into bungalows and condos that are only slightly smaller than their previous home.
In many cases, boomers are taking on debt to buy luxury homes, despite the fact that the typical boomers buying in Canada’s high-end market earn an average of $500,000 and can easily afford to pay cash. Often they’re looking to take advantage of low interest rates to invest their home equity in vacation homes, investment properties or the stock market.

More often than not, that money is flowing to their children in the form of large down payments for luxury homes. For many boomers, Mr. McCredie says, the down payment is a form of succession planning, as many see the housing market as a safe and tax-free way to transfer wealth to their kids.
Thanks to comparatively lower incomes and fewer savings than other generations, young luxury buyers are “overwhelmingly” relying on outside support for a down payment, the report said.
The money isn’t always a gift. In many cases, parents might be paying $200,000 to $300,000 toward a $1-million home for their children, but are doing it in the form of loans and mortgages and are putting liens on the property as to keep their children from squandering their real estate wealth or losing their home in a break-up.

That generational wealth transfer is helping to drive a wedge in the first-time home buyers market. Wealthy Generation Y buyers, those under age 35, typically pay twice as much for their homes as the average first-time buyer. They can spend as much as 15 times their household income on a home purchase, thanks to help from mom and dad.

That gap is most dramatic in Calgary, where the typical first-time buyer spends $363,400 on a property. Young luxury buyers in the city are willing to spend anywhere from $800,000 to $1.5-million even though their incomes are modest compared to luxury buyers in other Canadian cities: averaging just $50,000 to $100,000. The typical luxury home for a young Calgary buyer is a 2,000-square-foot, four bedroom, three bathroom townhouse or duplex, even though most are young single men or childless couples.

Despite a helping hand from family, roughly 85 per cent of young buyers also take out a mortgage. That number was as high as 95 per cent in Toronto, where Gen Y buyers earned an average of $80,000 to $250,000 and bought homes worth $800,000 to $2-million.

Largely left out of the generational wealth transfer are buyers from Generation X, age 34 to 54, of whom just 35 per cent received help from family to afford a home, the report said.
Many Gen X buyers had parents who had lived through the twin real estate busts of the early 1980s and 1990s, when interest rates soared to double digits. They are much less willing or able to help their kids get into the housing market.

“I really think Gen X is very aware of that,” Mr. McCredie said. “Gen Y has never seen anything other than cheap money.”

Having lived through a soaring real estate market, many boomers are now worried their children will miss out on rising prices if they don’t get into the market while they’re young. “Those are the people who are literally saying to their kids: It’s important to participate in the real estate market, because if you don’t you’ll never be in this marketplace.”