Calgary condo inventory declines
April 23, 2018
First-quarter new condo sales in Calgary plunged 32 per cent from the previous quarter, according to Urban Analytics. The research agency said the new mortgage stress caused both Q4 2017 sales to rise and Q1 2018 sales to drop.
Buyers surged into the market before year-end 2017 to avoid the mortgage stress-test rules that came in January 1, which skewed sales higher than normal.
“Younger, price-sensitive buyers were less active in the initial months of 2018 as they adjusted to the reduced buying power that resulted from the new rule changes,” says Urban Analytics senior market analyst Kimberly Poffenroth. “We anticipate these buyers to begin re-entering the market as the spring selling season commences. We expect they will be particularly interested in more affordably priced townhome and wood-frame condominium product.”
Despite these challenges, year-over-year sales of multi-family homes increased 17 per cent in the first quarter—a sign of increasing confidence among prospective buyers, according to Urban Analytics.
With little new construction—only one condo project has started in downtown Calgary in the last two years—the inventory is being reduced. There are now 758 complete and unsold new Calgary condos, a 25 per cent reduction from a year earlier.
On a year-over-year basis, concrete condominiums experienced the biggest drop in unsold inventory with a 38 percent decrease. “With just 75 unsold concrete condominium units in the pre-construction stage, this sector of the market could be headed for a supply shortfall unless some additional new projects are launched this year,” Poffenroth cautioned.