Real Estate in Alberta: The Condo Strikes Back!
From Calgary to Red Deer to Edmonton and everywhere in between, Albertans are starting to catch on to what we’ve already known for ages: condo living is where it’s at.
Generally speaking, spring is that special time of year for the real estate market when sales typically begin to pick up as people start to emerge from their semi-hibernation over the long, cold winter months. However, this year, things are continuing to trend somewhat on the slow side as we make our way steadily towards warmer weather; that is, in all but one significant area. You guessed it: while the market in general is plodding along, condo sales are off and running.
What’s led to this increased interest in condo living?
The Benefits of Condo Living
Condo ownership has long appealed to a certain subset of the population – single, young professionals and elderly retirees, particularly. As we head deeper into 2019, the Alberta condo market is continuing to heat up throughout the province as more people from all different walks of life find themselves foregoing single family detached homes and purchasing a condo instead.
While it’s tough to determine a single, specific cause responsible for this increased interest in purchasing a condo, there are a number of contributing factors that have played a hand in making condo living more appealing across the board, including (but certainly not limited to):
- Incoming CPA changes. Alberta’s Condominium Property Act is set to see some pretty profound amendments come into effect in less than two weeks’ time on July 1, with subsequent changes landing half a year later on January 1, 2020. These adjustments will increase transparency, communication, and accountability between residents, boards and condo management companies, and could be just what some buyers were waiting for before they signed on the dotted line.
- Removal of age restrictions. Just over one year ago, age-restrictions on condo buildings across the province were lifted, making condo living for families an attractive prospect in the sense that it expanded the market for this segment of buyers almost overnight.
- Lower economic barrier to entry. Let’s face it: despite recent positive developments and indicators, the economy here in Alberta is still definitely in recovery mode. With this in mind, the lower costs associated with condo ownership are incredibly appealing and certainly work to play a part in the recent surge in popularity that condos have seen here in our province.
With all these details taken into consideration, it’s no wonder people are excited at the prospect of condo ownership! However, just as quickly as condos have risen in popularity, they could also drop – and with that in mind, it’s worth keeping an eye on a few significant specifics that could very well impact the condo popularity across the board.
Things to Watch Out For
While the benefits of condo living have continued to grow and multiply over the past few years, this hardly means that condo popularity is a runaway train that nothing can stop. There are a couple of factors that have the potential to negatively impact the condo real estate market here in Alberta in a very significant way that are worth keeping an eye on as we move forward.
The first of these is the rental market. As with any type of real estate, the decision that individuals make to rent vs. to buy often balances on a knife edge, teeter-tottering almost entirely between the costs associated with one option compared to the other. Currently, prices are coming down in the real estate market while condo rentals have continued to get more and more expensive, pushing people to take the plunge and buy rather than continuing to rent. If things start to tip in the opposite direction, though, expect condo sales to slump as more and more individuals start to focus on the month-to-month financial benefits of renting once more.
The second thing to watch out for is supply – or, more specifically, oversupply. With an increased popularity of condo living comes a boost in interest from developers and an associated uptick in builds and projects as a result. This can sometimes lead to overbuilding, which creates an excess of inventory in relation to demand. This drives down real estate costs and devalues existing properties, resulting a less-than-attractive investment for anyone looking to purchase a condo within this sort of a market. While Calgary appears to have its supply situation mostly firmly in-hand, neighbouring Edmonton has been experiencing problems in this area, creating a market that is definitely a bit tougher than what you might find in other cities and communities throughout the province.
With the condominium’s recent rise to rock-stardom on the real estate market, we bet dollars to doughnuts that you’ve seen an influx of fresh new faces around your building recently. Make them feel welcome. Not sure how? Get in touch with us at Catalyst Condo Management today for some pointers on how to help the new residents in your complex connect with the greater condo community and feel like they’re right at home.