Andrew Kyle’s Blog - Calgary Real Estate

The June 2008 edition of CMHC’s “Housing Now” report for Calgary and area was issued on Sunday.

June 2008 Housing Now - http://www.cmhc-schl.gc.ca/odpub/esub/64167/64167_2008_M06.pdf

We have reached a new record of multi-family (apartment condos, townhouses and semi-attached homes) homes under construction. The total in May was 11,915, of which 9,432 were apartment-style condos. This is worrisome considering the condo market stands at an Absorption rate of 5.2 this week, There are already considerably more condos on the market than buyers. The silver lining though is that the inventory of “completed but not occupied” units actually decreased from April to May – 655 new units were completed but 673 units were absorbed (by sales or rentals). The fairly healthy rental market (2.0% vacancy rate currently) is perhaps saving most condo investors from grief in the short term.

It remains to be seen if the record number of multis under construction is going drive the condo market down even further. The construction of apartment-style condos in particular are very susceptible market slowdowns as we are in right now. This is because of the long construction times of these complexes. Developers simply cannot react to market swings when the development time of a complex is 3 years or more.

So expect to see more and more developers of new condos offering to pay Realtor commissions to buyers who chose to have the protection of being represented by one, This is to ensure they do not get stuck with too many units that they cannot sell. An example is the “Xenex on 12th“ which is now offering Realtor commissions for Buyer’s Realtors. So it is a great time for the buyer who has been interested in a new condo but has stayed away from them for want of the protection a condo Realtor can give them.

As for the question I asked in the title of this article, “Too Many Condos Coming on Stream, Too Few Buyers?” The answer right now is clearly “Yes” as evidenced by the Absorption Rate for condos being 5.2, but it remains to be seen if the situation will get worse before it gets better because of the record number of condos under construction. Can young professionals migrating to the city for all the jobs the oil boom is providing absorb the record number of new apartment condos currently under construction? That is the key – time will tell.

- Andrew Kyle

Figures are copyright CMHC.

I added a cool new feature to all the listings on AndrewKyle.com this morning - a Walkscore^TM assessment. Walkscore is a site that estimates the walkability of a given property by it’s proximity to stores, entertainment, restaurants, parks and so on.

Here’s an example for the Emerald Stone condo in Connaught:

And here it is on my listing pages:

There was a nice rundown in the Calgary Herald today on the city’s farmers markets. And since I am a GoogleMaps nut, I decided to put all of them on a Google map - see below. Left-click on the icon for the market’s hours and directions.

View Larger Map

If you think this is a useful map then please click on “View Larger Map” and then “Rate This Map”, so it will show up for others on GoogleMaps.

Happy and healthy shopping! Remember, it’s all about quality of life!

- Andrew

It looks like the trend to a more balanced market continues. Solds are up and inventories are coming down. You can say you heard it hear first - 2 weeks before you will read about it in the Herald.

- Andrew Kyle

I love this website:
http://calgaryrealestatemarketblog.wordpress.com/

He has some really cool examinations and opinions on real estate trends in Alberta. If you have an interest in the finer points of real estate market trends then I think you will find it very interesting.

I think it is the best non-Realtor real estate website in Canada.

- Andrew Kyle

The Fraser Institute recently released it’s take on Alberta Schools based on 2006-07 provincial testing results.

You can look up any school by name in their database and see it’s report card. It’s a great tool for checking on neighbourhoods you are considering moving to.

Look up an Elementary School:
http://www.fraserinstitute.org/reportcards/schoolperformance/schoolfinder.aspx?prov=AB&lv=E&l=A

Look up a High School:
http://www.fraserinstitute.org/reportcards/schoolperformance/schoolfinder.aspx?prov=AB&lv=S&l=A

The database includes, public, seperate and private schools.

The Fraser Institute uses Grades 3 and 6 test results to grade elementary schools, and uses diploma examination results, grade-to-grade transition rates, and graduation rates to grade high schools.

The Institute itself urges parents not to put too much emphasis on the last year’s score or ranking, and I agree. Look at the last 5 years scores to get a more accurate picture. Also the Institute uses arrows (up or down) in the right-most column to indicate trends (if any) in the school’s performance over 5 years - that can be more useful than just the last year’s ranking or score.

- Andrew

It’s been announced that Jaume Plensa, arguably the world’s most renowned living public sculpture artist has been chosen to create a work for the Encana Bow Tower currently under construction on 6 Ave downtown. The tower will be the tallest building in western Canada when it is complete. The full story:

http://calsun.canoe.ca/News/Columnists/Platt_Michael/2008/06/16/5890296-sun.php

Here’s some of Plensa’s other works:

An interesting little article in the Herald today. The Stampede is proposing an extension of 17 Ave across the LRT tracks into the road system of the Stampede grounds.

Full article: http://www.canada.com/calgaryherald/news/story.html?id=f35bea4f-df2c-4a64-a498-50a5c567ea25

I could see that eventually causing a revitalization along 17 Ave between McLeod Trail and 2 St SW, which has some vacant lots and older light-industrial/commercial businesses such as a body shop or two. Would the red mile eventually shift to the east I wonder? I think it might, as a matter of fact I am sure it would as the restaurants and bars closer to the Dome and Stampede Grounds take advantage of the closer proximity.

It’s an interesting proposal. The one concern i would have is traffic backing up 17 Ave at Rush hour, like it sometimes does on 25 Ave, because of the trains coming by every 3 or 4 minutes on average.

- Andrew Kyle

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CMHC published their Spring 2008 Rental Market Report on June 5.

The overall vacancy rate in Calgary in April 2008 is 2.0%, compared to 0.5% in April 2007. The breakdown:

Bachelor: 2.6%

1-Bedroom: 1.8%

2-bedroom: 2.2%

Average rents April 2007: bachelor:$608 1-bedroom:$848 2-bedroom:$1008 3+Bedroom:$939

Average rents April 2008: bachelor:$651 1-bedroom:$906 2-bedroom:$1081 3+bedroom:$1105

The full report including other markets: http://www.cmhc-schl.gc.ca/odpub/esub/64725/64725_2008_B01.pdf

- Andrew Kyle

UPDATE 2-Jul-2008: This property is now off the market.

It looks like the Calgary market has turned the corner, inventory is coming down now. The 3rd week of May appears to have been the high water mark for Absorption Rate and inventories. Knock on wood.

(c) 2008 Andrew Kyle. Feel free to re-use these charts provided you place a link back to this blog or my main website www.AndrewKyle.com.