It’s pretty clear that the Calgary Real Estate market is going through a change and discovering what it’s “new normal” will be as we come out of the downturn. After years of rapid construction, particularly with condominium buildings,
we’renow faced with the highest number of unsold condos on the market since 2001 . While this excess of available product clearly demonstrates the type of downturn economy Calgary has experienced, we want to draw attention the new trends developing because of the excess product on the market.
In particular, there are four main trends that show how the market is reshaping itself on a larger scale and how condo boards and residents can adapt for a more positive condo living experience.
With the change in the economy over the past few years, along with the amount of empty condo units on the market, developers are now building smaller condo buildings. For instance, instead of developing a condominium with 20 units, a developer may now only build a condo with six or eight units.
While the developer is still responsible for registering the condo building corporation through Alberta Land Titles, the potential buyers of these smaller condominiums will have to have more conversations around how to run their building in a cost effective manner. For instance, in a building with twelve or fewer units, it is not necessary to have a third party conduct a Reserve Fund Study, therefore, the unit owners need to determine how they’ll conduct the study in an objective manner to ensure the proper lifecycle of the building. Living in a smaller condo building introduces different options for running the building, including whether it makes sense to have a condo management company, such as Catalyst, support the running of the building or if the owners of the units in the building can manage the ins and outs of condo life.
During the Calgary boom throughout the 2007 – 2010 period, condo developments went up fast. With a number of these buildings now hitting the 10-year mark, corners that were cut in the development phase are making themselves known. With these discoveries appearing, more new condo developments are completing a technical audit which is an engineering report that addresses building deficiencies in new builds. This should typically take place as soon as the condo developer hands over the building to the condo board, after they’ve had an AGM.
As a technical audit can be an 8 – 12 week process, it’s recommended that they are completed as soon as possible to ensure all information is collected and issues addressed before the New Home Warranty expiration date. If done within this 8 – 12 week period, your condo board can submit the findings of the audit to the developer, who should correct these issues prior to them becoming a bigger, more costly headache, which can impact condo values.
It’s important to note that there will ALWAYS be deficiencies as no build comes out without zero deficiencies. The technical audit is to be done simply to identify CRITICAL deficiencies that go beyond cosmetic.
Over the next few years, it will be interesting to see what trends continue, along with the changes that are made to the Condominium Property Act based on the engagement survey feedback. Truthfully, we find this an exciting time to be in the condo industry, seeing how Acts are being changed to better protect condo unit owners and boards, thus raising the standards of the entire industry. If you see any new trends and are keen to share, join the conversation at Alberta Condo Owners for Change or contact Catalyst as we’re always looking for different points of views and input!