Calgary Housing Surges

Started by Sportsdude, Mar 10 06 07:19

Previous topic - Next topic

Sportsdude

[DIV id=headline][H2]Calgary housing surges[/H2][/DIV][DIV id=author][P class=byline]PATRICK BRETHOUR

[P class=source]From Friday's Globe and Mail

[UL class=columnistInfo][/UL][/DIV][DIV id=article style="FONT-SIZE: 100%"][!-- dateline --]CALGARY[!-- /dateline --] — Calgary's housing market is dramatically outpacing the rest of the country, in a price surge not seen since the real estate bubble in Toronto 15 years ago.

The price of new housing in the oil patch capital rose by more than a fifth for the 12 months ended January, 2006 -- triple the rate of the entire country, and far ahead of second-place Edmonton, according to Statistics Canada.

The numbers are impressive, but they do not convey the full extent to which Calgary's real estate market is being transformed. Bidding wars for properties, once a rarity, are now a fixture in nearly half of deals. Developers are poaching construction workers straight from rivals' work sites. There are 10-month waiting lists for new housing. And some builders have simply thrown up their hands in the face of soaring material and labour costs, freezing new construction.

[DIV class="bigbox ad" id=boxR][SCRIPT type=text/XXXXscript ads="1"]aPs="boxR";[/SCRIPT][SCRIPT type=text/XXXXscript]var boxRAC = fnTdo('a'+'ai',300,250,ai,'j',nc);[/SCRIPT][/DIV]It all adds up to Calgary joining the rarefied ranks of real estate occupied by Toronto and Vancouver. "We're in the big leagues in so many ways," said Alan Tennant, a real estate broker in the Calgary area.

"And now the housing prices are reflecting that," he said.

That is a jolt to out-of-province buyers still expecting to find a comparative bargain in Calgary. Colin Kennedy, an agent for Prudential Toolepeet Real Estate, said one of his clients, a British Columbia woman, arrived in Calgary hoping to find a house comparable to her Vancouver home, but for under $500,000.

He came up dry at that price, and had to persuade her to raise her sights to a $600,000 home. "She was a little bit shocked she had to do it," he said.

Much of the boom in housing is being driven by the redevelopment of older neighbourhoods, where postwar bungalows are being demolished for much pricier homes. Mr. Kennedy is selling such a property in west-central Calgary, where each unit of a duplex is listed for $499,000.

That is a million dollars of real estate in an area where, until recently, bungalows changed hands for well under $300,000.

The growing size of Calgary and the increasing difficulty of developing virgin land have combined to make the inner city much more attractive, and much more expensive. "It's the rise of the infill," Mr. Kennedy said.

The hunger for real estate in the Calgary area even has some industry players sitting on the sidelines. One national commercial real estate executive said small, local buyers are pushing up land prices, making it hard for him to find parcels of land at prices that will generate enough return to make it worthwhile for his business.

And land is just the start of the cost pressures on builders. The oil boom has soaked up skilled tradespeople, reducing the labour pool for residential construction. Similarly, supplies of concrete and structural steel are strained. Those rising costs have been passed on to new-home buyers, Mr. Tennant said, adding that he does not believe the increases are unreasonable.

Those rising costs have overwhelmed some builders, even though sales prices have been soaring. Alanridge Homes, backed by a group of private investors, is winding down its business because it could not find a way to turn a profit from building custom homes for fixed prices.

Costs are rising sharply and suddenly, making it nearly impossible for builders to predict what price they need to charge home buyers. "Chances are, my costs are going to be out of sight," said Don Howie, chief executive officer of Alanridge.

Edmonton, which is actually closer to the bulk of oil production in Alberta, is experiencing a more modest boom in new housing, with prices up 12 per cent from January, 2005, to January, 2006, according to Statscan. Toronto and Vancouver, meanwhile, posted relatively anemic gains of 4.6 per cent and 5.7 per cent, below the national average of 6.6 per cent.

Flowering of Calgary's real estate market

The volume of business has doubled at Dragonfly Creations in downtown Calgary over the past year, where real estate agents get a 10 per cent discount on gift baskets for new homeowners. The shop sold nearly 700 baskets last month, up from the 300 to 400 it soled during the same period last year 'I think there's potential for a lot more growth,' said Clair Wilson, manager.

Calgary's real estate market was the hottest in Canada in February, with resale homes rising 18.6% in value year over year. That pace puts it well above the rate seen during the last national real estate boom in the late 1980's and early 1990s.

CHART SOURCE: CALGARY REAL ESTATE BOARD

[/DIV]
"We can't stop here. This is bat country."

CK

Tell me about it. I sold my puny condo last summer in Burnaby, bought a very sweet 2 story Victorian house in Calgary. The value jumped almost $95,000 in a year. Nowadays, if I was to sell a small condo in Burnaby, it would buy me only a slightly larger condo in Calgary.
I am losing employees in Calgary. Brilliant guys with young families that move here to start a new life. Only to pack their bags and move because they don't want to be stuck in a small apartment forever. It is tough. How are young families supposed to get started? Same crap I went through in Vancouver![/DIV]One co-worker is actually trying to buy a house and the homes he is interested in, are being bid on by an average of 27 other offers. Demand, along with the cost of building materials is out of control. I thank my lucky stars I bought my house when I did.

Sportsdude

Yeah, I remember all those Calgary vs. Vancouver threads on DV. And people were like you can actually live in Calgary, blah, blah. [/DIV]This is proof I guess that everywhere you go in the west be it the U.S. or Canada things are going to get pricey. [/DIV]Thats why out of the three places I want to immigrate to, only one of the cities is on the west coast (vancouver) the other two are Ottawa and Montreal.
"We can't stop here. This is bat country."

CK

I remember all those Calgary vs. Vancouver threads on DV[/DIV] [/DIV]As long as you realize, most of the clowns that posted on those threads are brainless trolls, and both cities are really good, and bad, in their own ways. Best of luck wherever you decide to go man!

kits

Well, am I ever looking like a rookie real estate prospector.  I owned a 2400 sq foot, loft style condo on Coach Hill in Calgary over looking the downtown, (CK would know where that is) that I purchased for $200k, and sold 9 onths later for $240  This was 3 years ago now.  I wonder what that would be worth to me today?
It takes a big man to cry, but it takes a bigger man to laugh at that man.

Sportsdude

"We can't stop here. This is bat country."

CK

kits wrote:
Well, am I ever looking like a rookie real estate prospector.  I owned a 2400 sq foot, loft style condo on Coach Hill in Calgary over looking the downtown, (CK would know where that is) that I purchased for $200k, and sold 9 onths later for $240  This was 3 years ago now.  I wonder what that would be worth to me today?[/DIV] [/DIV]Man! out of curiousity, I did an MLS search to get an idea. There aren't even condos on the query, they probably sell too fast. [/DIV]Check out this house, average house (nothing too special), 2022.56 sqft, $550,000. 3 years ago, it was probably around $200,000.[/DIV][A href="http://www.mls.ca/PropertyDetails.aspx?PropertyID=4340818&Mode=0&Page=1&vs=1&rlt=&cp=&pt=20&mp=0-0-0&mrt=-1-0-0&Beds=0-0&Baths=0-0&f=&ft=all&o=A&of=1&ps=10&ptgid=1&aid=4826&MapURL=%3fAreaID%3d6401"]http://www.mls.ca/PropertyDetails.aspx?PropertyID=4340818&Mode=0&Page=1&vs=1&rlt=&cp=&pt=20&mp=0-0-0&mrt=-1-0-0&Beds=0-0&Baths=0-0&f=&ft=all&o=A&of=1&ps=10&ptgid=1&aid=4826&MapURL=%3fAreaID%3d6401[/A]
 

kits

[A href="http://local.google.com/?ll=51.05688,-114.177067&spn=0.009954,0.019956"]http://local.google.com/?ll=51.05688,-114.177067&spn=0.009954,0.019956[/A]

I am not too sure if this link will work:....

I was right near the corner of Old Banff Coach Rd, and Coach Hill rd. on the side of the hill, facing the downtown.  There is a challet style condo complex there.
It takes a big man to cry, but it takes a bigger man to laugh at that man.

CK

Yep, I know exactly where that is. Right by the CTV studios. I have been to Strrathcona a few times for Shalaieleis (sp?) pub.

CK

Oh, I might not have been clear earlier, I did a search for Coach Hill only. Found 1 house, and that was it. Who knew? I knew houses were going to rise, but this is ridiculous.