- Arriva Towers, Web: www.arrivacondos.com
Are you thinking of buying or selling a condo in Calgary? Enhance your decision-making with the latest information on Calgary condos.
According to the CMHC, as of October 2008, there were 7411 apartment + other units under construction. (see dwelling type definitions at end of article)
That does not include the 2,777 Single-detached, 684 semi-detached, or the 1,002 Row dwellings - which brings the total to 11,872 homes currently under construction in Calgary. (Source: CMHC Housing Information Monthly, November 2008, Pg. 19, Table A5-1)
You have to take into account how many of those units are pre-sold. And of those that were pre-sold, how many were purchased by speculators intending on resale. (Remember, these projects began months or years ago when market conditions were much different) In the past, projects would go ahead with just half of the units pre-sold. That number now is closer to 75 per cent, meaning getting projects off the ground has become much more difficult. Source
“As for new construction I think, definitely, the market got ahead of itself a bit. So now we’re seeing a correction. It might mean some projects are delayed. It might even mean some are cancelled,” said Todd Hirsch, senior economist with ATB Financial. “But this is part of the normal kind of correction mechanism that takes place in a market when things get a little ahead of themselves.”
He continues, “We’re in a market that has slowed from the peak and . . . the biggest oversupply situation we’re seeing in Calgary’s residential market is the condo side.” (Source)
The recent RE/MAX Housing Market Outlook 2009 echoes the same sentiments stating, “Calgary’s high-rise condominium market, propped-up by speculation in recent years, is more vulnerable to new market realities. Thousands of new units are expected to come on-stream in 2009, which could create a glut of listings. Some developers have already moved to mitigate their losses by stopping new projects.” (Source)
Condo Projects Cancelled
This over-supply of condos has caused developers to either delay or stop construction on their projects.
- Gateway Midtown One
Gateway Midtown
515 – 10th Avenue S.W.
26 Floors
Status: Suspended. Construction Began: 2006
- Gateway Midtown Two
517 – 10th Ave S.W.
30 floors
Status: Suspended. Construction Began: 2006
Resiance Corporation, suspended construction because of rising costs. Spokesman Shael Gelfand says, “It’s with deep regret we announce, at least temporarily, Gateway Midtown has gone into suspension. It’s primarily due to rising costs for labour and for materials. It’s just made it too expensive.”
The decision affects a lot of buyers and investors. More than 500 of the 650 units have been sold. Their deposits are now being held in trust at a lawyer’s office until a decision is made whether to proceed with the project. (Source)
- Skytower
1110 – 1st Street S.E.
Status: Suspended. Construction Began: 2006
“Skytower, at 10th Avenue and First Street S.W. has yet to come out of the ground and there’s speculation the project will morph into an office building or parkade.”
Update, December 5th: Residents fear abandoned Skytower project causing structural damage (Calgary Sun)
- Manchester Station
3rd St & 55th Ave SW
Only 28 of the 99 units have been sold. Todd Gow, a spokesman for Condo Source Corporation, says the project is only on hold.
Some developers have told CBC News another half-dozen large condo projects are at risk. (Source)
Update: January 31, 2009 – Calgary Herald
Market Stalls Condo Project
“A Bridgeland condo project, once hailed as a shining example of inner-city development, is being put on hold because of the falling real estate market.
The first condos in the Crossings at the Bridges, a 142-unit project that’s part of the landmark Bridges development, were due to start being sold in February, with construction to follow shortly after.”
Update: January 2009 – Arriva Towers
“John Torode, president of Torode Residential –which is constructing numerous condos and commercial buildings in the Beltline and has completed the arriVa tower that signals the start of the rejuvenation of Victoria Park–has changed his plans to build four condo towers in arriVa’s complex.
He had cancelled the fourth tower earlier and now has announced the third tower will be changed instead to a smaller boutique hotel.” (Source)
Update: April 7, 2009 Arriva Tower, number 2, is now on hold as the developer, Torode, seeks bankruptcy protection. Work has stopped on the 42-storey second tower of the Arriva condo project which has about 60 per cent of its 221 units pre-sold. (Calgary Herald, April 7 2009)
Update: March 18, 2009
Here’s an update on the condo projects that have been halted:
1. Astoria–9th Street And 10Th Avenue S. W.
2. Oslo–12th Street And 11Th Avenue S. W.
3. Strategic On 4Th –2004 4Th Street S. W.
4. Gateway Midtown–517 10Th Ave. S. W.
5. Sky Tower–201 10Th Ave. S. W.
6. Manchester Station — 5320 2Nd St. S. W. (Filled In)
7. Haras–1215 5Th St. S. W. (Filled In)
8. Grand Park–101 29Th Ave. N. E. (Filled In)
9. Grand Riviera–1505 23Rd Ave. S. W.
You can read more about it here
For a great look at the proposed projects, under construction, or on hold, take a look at Skyscraperpage.com
Condo Inventory
The number of vacant/new listings on MLS points to the amount of speculation that was involved in the Calgary condo market. More than 1 in 3 condos on the market at November’s month end were vacant (922 out of 2399) Over 300 of those vacant were built in 2007-2008.
There are more new/vacant condos on the market today than the entire month-end inventories of Jan-April 2007 (Jan: 886, Feb: 654, Mar: 726, April: 898)
For a “balanced market,” high inventory levels would need to be offset by increased sales volume to create about a 2 to 3.5 month absorption rate. As of month-end November 2008, Calgary condos had an absorption rate of 8.4 months.
Typically, inventory is the lowest during the winter months which makes me very wary seeing the current level amidst very sluggish sales and a backdrop of economic uncertainty.
Average & Median Prices
If you have any questions or are thinking about buying or selling real estate please feel free to contact me. In the meantime, I’d love to hear your viewpoint on the real estate market in Calgary. All respectful comments and viewpoints are appreciated.
-
Mike Fotiou, First Place Realty, is a licensed Realtor(R) and Certified Condominium Specialist. Feel free to contact or email with any questions.
-
CMHC Dwelling Type & Definitions
Single Family dwelling is a building containing only one dwelling unit, which is completely separated on all sides from any other dwelling or structure.
Semi dwelling is one of two dwellings located side-by-side in a building, adjoining no other structure and separated by a common or party wall extending from ground to roof.
Row dwelling is a ground-oriented dwelling attached to two or more similar units so that the resulting row structure contains three or more units.
Apartment and others dwelling includes all dwellings other than those described above, including structures commonly referred to as duplexes, triplexes, double duplexes and row duplexes.
