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Move over single-family detached homes. There is a growing alternative in Calgary for first-time and other price-conscious buyers.
“Townhomes have become increasingly popular,” says realtor Jared Chamberlain of Chamberlain Group with Real Broker in Calgary.
Although townhome sales decreased about 14 per cent year to date in Calgary, ending Oct. 31, that is more of a factor of ongoing high demand leading to inventory constraints in affordable price ranges, Chamberlain says.
Adding to buyers’ limitations today are significantly higher interest rates.
That’s one reason why apartment condominiums have seen stronger recent sales growth due to their lower average prices.
Yet many buyers still prefer a townhome if they can find one they want in their price range, Chamberlain says.
What’s more, comparing townhomes sales from January to October this year with the same span in 2021 — a hot market for housing amid low borrowing costs — paints a more compelling picture.
Townhome sales grew by about 22 per cent this year versus the first 10 months of 2021, while single-family detached homes saw sales fall by 23 per cent this year compared with 2021, Chamberlain says.
That said, apartment condominiums sales grew about 98 per cent over that same period, he adds.
Yet for buyers — particularly first-time buyers — who can afford townhomes today, the segment has much to offer. What’s more, a recent study by Zoocasa revealed that townhomes in Calgary remain highly affordable.
It found the average minimum down payment for a Calgary townhome is about $22,000, and it has only increased modestly from 2018 when the minimum payment was about $16,600. That ranks Calgary seventh among 19 cities in Canada, and tops among the nation’s largest cities.
Zoocasa spokesperson Patti Cosgarea adds that Calgary’s townhome benchmark price of about $440,000, is 60 per cent less than in Vancouver and 47 per cent less than the Toronto benchmark.
“The more affordable the price, the more significantly a buyer’s purchasing power can be improved, meaning buyers who have been priced out of the townhouse market in other major cities may find their dollar goes further in Calgary.”
Anecdotally, the price differential has sparked greater demand in the segment from out-of-town buyers who could not afford a townhome in those markets and are attracted to the lifestyle the housing type affords, Chamberlains says.
“They are often located in desirable areas with access to amenities,” Chamberlain says. “Additionally, townhomes are more appealing to a wider range of buyers, including families, multi-generational households and those with roommates, due to their affordability and ability to accommodate more people than apartment condos.”
Affordability, however, remains the prime attraction for many first-time buyers.
“Over the past two years, many of these buyers who wanted to purchase a detached home were unable to save or add to their down payment as quickly as home values increased,” he says. “So, they had to adjust their strategy to purchasing a townhome.”
Although a desirable second choice, townhomes can involve more complex decision-making. Many are part of condominium structures, requiring examination of the board, bylaws and reserve funds. They also have monthly fees, which can negatively affect buyers’ borrowing capacity, Chamberlain says.
And given their recent higher demand, buyers are now facing similar challenges affecting the single-family detached home market for the last two years, he adds.
“Lower inventory can limit choices and further drive up prices.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
