New multi-family home sales in Calgary of 750 in the fourth quarter of 2019 were down three per cent from the previous quarter and 10 per cent lower year-over-year, a real estate research firm reports.
Urban Analytics did say, however, that the market showed some resilience over the year.
Kimberly Poffenroth, UA’s vice-president, Business Development & Market Analysts (Alberta), said overall sales activity for the fourth quarter did well for an economy which faced an accumulation of headwinds throughout 2019.
“Buyers seem to be more acclimated to the current state of both our municipal and provincial economy and are still finding reasons to purchase new multi-family condominium and townhome units,” she said.
“The relatively consistent quarterly sales throughout the year amidst the continued implications of the B20 mortgage stress test back in 2018, the lagged impacts of the federal interest rate hikes throughout the last two years and the recent re-election of the Liberal Party of Canada has proven Calgary’s resilience and sustained demand for new multi-family product.
“Both project developers and buyers have continued to adapt to the changing economic climate which has had a direct impact on the market’s ability to improve for three consecutive quarters to start the year.”
The report said 2,879 new condominiums and townhomes were sold in Calgary in 2019, which is 3.7 per cent lower than 2018 but is still up nearly 28 per cent compared to 2016. The townhome sector accounted for 62 per cent, or 1,551 units, of total sales in 2019. Wood frame and concrete condominiums accounted for 41 per cent and 12 per cent of total sales for the year respectively.
“Stronger sales activity in the townhome sector reflects the general affordability of townhome product in suburban locations,” added Poffenroth.
The report said one of the key factors behind fourth quarter sales being 10 per cent lower than last year is the fact there were fewer real estate projects.
There were 34 new multi-family project launches in Calgary in 2019, which is down from the 51 project launches recorded in 2018.
“Fewer project launches in 2019 was not surprising and is the result of many potential condominium projects being converted to purpose-built rental,” explained Poffenroth.
Overall new condominium sales in 2019 were down four per cent compared to last year and down eight per cent compared to 2017. The relatively similar annual sales totals of 2,879 in 2019 compared to 2,991 in 2018 is still encouraging considering the lack of new project launches that occurred in 2019 compared to 2018, said Urban Analytics.
Mario Toneguzzi is a business reporter in Calgary.
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