'Flippers' replaced by condo dwellers
Shift to homes to live in instead of simple investment
By Marty Hope, Calgary Herald
June 19, 2010
Calgarians aren't doing it as much as they were a year ago.
Those thinking about buying a condo for investment purposes has declined from just a year ago, says a national survey.
But despite a decline to 40 per cent this year, down from 52 per cent in 2009, Calgarians continue to lead the country in terms of those considering the investment route, says a TD Canada Trust poll.
But the number of flippers in the marketplace -- people buying and reselling in a short period of time -- has dramatically declined, says Christina Hagerty of Re/Max Realty Professionals.
"I am seeing a shift toward people buying a home to live in as opposed to speculators," she says. "People are seeing a long-term value and aren't looking to flip, (which is) what got us in trouble in the first place."
Forty-two per cent of Calgarians polled say lower maintenance with condos versus other styles of homes is the biggest motivating factor for buying a condo.
Affordability is the second strongest driver -- but only at 18 per cent.
"Calgarians continue to see the value in purchasing a condo as an investment strategy," says Chris Wisniewski, associate vice-president of real estate and secured lending for TD Canada Trust.
"Affordability and stable monthly expenses can make condos very attractive for both first-time buyers and investors."
Of the 40 per cent looking at condos as a possible investment opportunity, 41 per cent of that total would consider using the condo as a long-term source of rental income compared to 35 per cent nationally.
While slightly more than one in four Canadians say they plan to eventually move into their rental unit, only 16 per cent of Calgarians have plans to do so.
Jessy Bilodeau, mobile mortgage specialist in Calgary for TD Canada Trust, says condo prices in Calgary are starting to increase, as has the number of available units for sale.
"The current increase in supply would suggest prices may not rise any further as buyers will have more options to choose from," she says.
Carlimi and Jose Velazquez decided the time was right for them to get out of rental and into homeownership.
For the couple, who are expecting their first child in October, affordability and location were key to their decision to buy their first home.
"We're going to be paying less a month for our townhouse than we've been paying in rent," says Carlimi, adding that they are currently living in the Sasso development in the Beltline region of Calgary.
The couple, who married four years ago, also took advantage of historically low rates.
"Rates were going to start to go up, so we decided it was time to buy," says Carlimi.
The couple moved up its original purchase date because of the expected rate changes.
What they bought was a 1,300-square-foot home in Mosaic Aspen Hills by Heartland Homes.
They expect to take possession of the three-bedroom, 2 1/2-bath townhouse in August.
"We like the layout of the townhouse and also the location, says Carlimi. "We're still close to downtown and to our jobs and we have good access, and this area isn't as expensive as some others around the city."
Both work in the oilpatch -- Carlimi for Saxon Energy and Jose for Husky Energy.
The survey of Calgarians by TD Canada Trust found that they appreciate the affordability of condos.
However, even if they had more money, many wouldn't change their plans to buy a condo -- 61 per cent of those consider purchasing or already own one.
"Additionally, one-third of Calgarians considering a condo purchase would raise their family in one," says the survey.
Hagerty, who specializes in condos, says the majority of condo owners also live in their units -- a total that increased this year compared to 2009,
"We see both men and women purchasing," she says. "I'm representing a lot of couples either married or into shared ownership because of the more stringent banking guidelines."
Hagerty also sees a more balanced condo market, adding that those for sale that are priced right are selling, but those who are "reaching" with their prices are sitting and will likely have to make price corrections.
Figures from the Calgary Real Estate Board show the average selling price of condos listed on the MLS system was $304,662, up from $275,212 a year ago.
For the first five months of this year, the average was sitting at $291,802, up nearly six per cent from 2009.
The TD Canada Trust survey reports that for the fourth year in a row, the majority of Calgarians (82 per cent this year) say they would spend less than $400,000 for a two-bedroom condo.
In terms of condo fees, only six per of respondents would pay more than $400 per month.
Photo: Active Listing (#307, 3600 15A Street SW) MLS# C3433222
