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We know that condominium homes are increasingly popular, but to what extent is that true in Calgary? Is the housing market pie being sliced differently between single-family homes and condo homes, be they villas, townhouses or apartment-style?
In fact, condominiums have doubled their market share in our city since 1988, only 12 years, and I suggest the process will soon accelerate. Clip this column and seal it in an envelope to be opened in another 12 years and see if I'm right. Condominiums will very likely again double their overall housing market share in that short period of time.
In 1988 condominium sales accounted for 10.7% of all residential Multiple-Listing Service ("MLS") sales tracked by the Calgary Real Estate Board. In year 2000, 21.6% of all residential MLS sales were condo homes of one style or another. Here are the numbers for some intervening years: In 1990, condos were 12.6% of the market. By 1993 they constituted 15.8%, and by 1997 condos made up 19.5% of the MLS market. Today we are well above 21% of all home sales being condos, which does not even include the current surge of new-home condo sales that are being made directly to the public and do not register on the MLS.
Why the change? I can answer in one word: price. The average condominium home is simply more affordable than the average single-family home. As of February of 2001, for example, MLS-sold houses in Calgary had an average value of about $190,000, while MLS-sold condominium homes had an average value of about $136,500. This means that condo homes cost about 75% of what people pay for single-family houses. The average difference of $50,000 or $55,000 can make home ownership possible for many first-time buyers and young families.
As if this fundamental price gap were not enough to maintain the growing shift to condominium homes, further factors are coming to bear that should accelerate the trend. Here are a few:
* Transit strikes and lengthening commuting times. How often do you need to suffer a transit stoppage or an hour-long traffic jam before you give up and move closer to work, be that downtown or another major city employment centre? Central locations are more expensive, so you may have to; or choose to; switch to condo living to get the location you want.
* Aging baby boomers tire of cutting lawns. As we age and retire, many baby boomers are opting for the convenience of maintenance-free living. That age bulge is only just beginning to enter retirement years, so watch for ever-more "villa" (single-level bungalows) retirement communities and "aging-in-place" condominium developments, which offer staged styles of accommodation.
* Rising energy costs. Be it gas for your car, natural gas to heat that 3,000 square-foot single-family palace, or the electricity that runs the furnace, we recently have a huge new incentive to live closer-in, and in more appropriately-sized accommodation.
* European-style urban living is "in". Face it, folks, it's "cool" to live in an inner-city condo these days. There has been a shift in public perception and a new acceptance of living in condominium apartments and other condo homes of various types. A "return to downtown" is just gaining steam in Calgary. City Hall is aware of the trend and encourages it, as more concentrated living makes more efficient use of civic services.
Condos are a fifth of Calgary's housing market today, up from a tenth just 12 years ago. By 2005, they will likely make up a third of the market. If I'm right, by 2012, condos will make up 40% of our total housing market. Will I put my money where my mouth is? You bet. I own three condos today and by June I'll be up to five. Toward my own retirement, it was either invest in condos or buy stock in the company that publishes Canada's Condo Guides. I see a bandwagon pulling out?.'think I'll get on and ride!
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