Calgary Real Estate buyers revel in condo over-supply
Calgary condo sales slow but still moving
It doesn’t appear to make sense.
We’re approaching the final quarter of this calendar year and in the world of Calgary Real Estate, there are record numbers of apartment-style condominiums on the market. Canada Mortgage and Housing says there may be in excess of 2,000 empty units in Calgary. Yet, more brand-new condo buildings continue to be built, especially in the inner city and surprisingly, in the northeast. All while owners of resale units are watching their days-on-the-market numbers pile up.
While it may appear fool-hardy to build more, even though our economy is slowly picking up, it’s important to remember that many of these new residential buildings, as well as redundant office space, were planned well before the price of oil plummeted. Developers start years before there are shovels in the ground, going through the permit process and sorting through other types of red tape. Even though the economy might slow down, once the wheels are in motion it might cost more money to stop than to see a project through to completion.
It might take a year or more, once the economy gets rolling, for all the excess inventory to be absorbed. At least that’s what economist Todd Hirsch of ATB Financial says. But when selling isn’t an option and you simply have to put your condo in the market, I have some advice for you.
Eyes Wide Open
Start with your listing price. As you know, it’s dependent on the Calgary Real Estate market – not on what you originally paid for it and not the sum of all your recent home improvements. We’ll pick a price based on the real estate trends in your area. If you’re in a Calgary neighbourhood where there aren’t new condos being built or there are few available, this bodes well for a good price and a quick sale. If you’re in those saturated inner-city areas, I encourage you to be super-competitive. What can you offer that no one else is offering? Do you have lots of square feet when so many of these new micro-condos are teeny tiny.
I always do a market analysis and check out the competition. With the benefit of beautiful listing photos now, we can see what types of interiors other properties might have. Say, for example, that all the units in a five-block radius around you have white quartz counters and those beautiful stainless appliances in the kitchen, we might look at doing some upgrades to your condo just to be more marketable. Or adjust your price accordingly. I can help determine if any renos you might want to do are worth it. If there’s no ROI, we’ll find another strategy.
I have found though that condo buyers don’t often go for the highest priced unit in any given area. Often, it’s the location that’s attractive and if they want your neighbourhood and can get in for less, typically they will. We want any improvements you make to a condo appropriate to the building and to the neighbourhood so that you’re not priced out of the market.
Why Resale Condos are Desirable
Those new developments with modern designs and sought-after amenities are great for some, but they can be unproven. What do I mean by that – well, usually buyers go in not knowing how much utilities will cost or may be tentative about condo fees which might rise unexpectedly and because life hasn’t happened in these developments yet, water or electrical issues have yet to surface. With resale units, the building has settled and owners have come to understand how the buildings work and how secure it might be. There’s history in the building, and that in and of itself has value to a new home owner.
Here’s another upside. While there are indeed a ton of Calgary condos on the market, prices haven’t slipped significantly – not as much as you might expect when inventory is so high. First-time buyers really wanting to getting in the market might need to work their way up to being able to afford a single-family home so they’ll start with something they can afford, and often that’s a condo.