With migration levels exploding thanks to a hot economy, both the new condo market and the condo resale market are experiencing high levels of growth, says Richard Corriveau, regional economist for the Prairies and the Northwest Territories for the Canada Mortgage and Housing Corporation.

“Obviously we are still seeing a lot of growth in the real estate market and condos are not immune to that. Demand is very high in both the resale market and the new market and it still really comes down to being a factor of price acceleration and affordability. Despite the fact that a condo that was listed at $175,000 last year is now going for $250,000, it still remains the more affordable option for people who are moving to Calgary or are simply looking for a smaller alternative.”

Thanks to a high level of presales and a growing number of construction starts, the new condo market continues to experience a growth that this city hasn’t seen since the ‘80s, he says.

“To put it into perspective there are 7,763 condo units under construction in Calgary as of the end of July and pre-sales are strong. This market definitely has some legs and the rapid price growth that we have seen in the detached market is also occurring in the multi-family market; condos aren’t immune to the increase and the average unit is going for around $400 per square foot.”

The average condominium in July went for $271,641, as opposed to $182,489 in July 2005 -- a 47 per cent increase. Despite the growth since last year, July’s numbers actually decreased by two per cent in price since June’s average price of $276,955 – something that can be accredited to the increase in inventory, says Kevin Clark, president of the Calgary Real Estate Board.

The inventory is very interesting in the condo market right now. It’s still a very strong market with 41 days of inventory versus 74 in the detached market. Essentially, we’ve been in a drought of listings for nine months now -- a drought of recovery of the inventory.  As the marketplace stabilizes the listing inventory is increasing.”

Both the resale market and the new market have a direct effect on one another, adds Clark. “The condo resale market versus the new condo market is a very interesting relationship. They often work in a bit of see saw fashion, a sort of uncertain tandem. Once again it really comes down to inventory and what is available. Whether you choose the route of a presale in a new development or you opt for a resale, it often comes down to possession times and listing availability.”

Another factor that has prompted the high new listings for July is the fear of the market nearing its price growth peak, says Corriveau. “There has been a lot of talk about the market peaking so many people are opting to list their homes to test the price so to speak. Also with new construction starts at record levels, people are listing their homes because of nearing possession times.”

Despite the small correction in the market, condos are still going quickly and usually above the listing price, says Christina Hagerty, of Re/Max Professionals. “It’s still a bit of an asking type of situation and although the supply and demand has stabilized slightly, the average condo I am seeing is still going for about five per cent above the listing price.”

The average condominium under $400,000 is still only spending about 12 days on the market before being snapped up, which is also affected by Calgary’s one per cent rental vacancy rate, she adds. “People that would have opted for the rental market are now leaping into the buying market because there just isn’t much of a choice.”

As the choice of young professionals desiring to live and play close to work, the resale market and the new market still remain hottest in the inner city. “There are a lot of individual and large developments in the inner city; those are definitely the highest in demand. Everywhere from Mission to Eau Claire to lower Mount Royal is seeing a high demand for the condo lifestyle” As long as the price tag on residential homes continues to rise, condos will remain a popular option for those looking to enter the market, says Clark.

“The price point obviously makes condos the more attractive alternative for many buyers. Not only are they less expensive because of their smaller size, they are far less maintenance for those looking to downgrade from a larger home and the overactive marketplace encourages many to take advantage of that.” So is there any end in sight to the city’s hot condo market?

“It’s difficult to predict just what will happen in the fall, it really depends on how high the inventory is,” he says. “I would venture to say that it will keep going largely in the same direction, with some slow softening.”  CL