This moderation was largely impacted by the buildup of resale home inventories providing consumers with a wide variety of housing options from which they could choose. Coupled with this was the uncharacteristic ability of buyers to make offers below list price, something that had not commonly occurred since 2005. As the levels of available inventory on the resale market remained high, interest in the new multi-family market moderated and sales activity during the later half of 2007 were much calmer than in 2006.

Overall, sales at new multi-family projects in Calgary surpassed 4,000 units in 2007, which is very positive given the challenging sales environment present throughout the year, including higher prices, lower supply, and competition from the resale market. Sales activity in all sectors was impacted by affordability, with the rapid price gains over the past two years affecting how many consumers can afford new homes in Calgary, particularly luxury homes located in the downtown region.

The number of new projects entering the market also influenced the volume of sales in 2007—and rates at which these projects sold during the sales launch stage. Thinking back to 2006, many projects had sold out almost all available inventories during the launch celebrations, substantially increasing the total sales for 2006 relative to 2007. These very rapid sales launches also depleted much of the available supply of inventory, meaning that consumers shopping in the spring market had fewer units to choose from, particularly if their desire was for lower priced product. As was the case in 2006, a larger share of the total sales for 2007 occurred during the first half of the year, with consumers most active during the busy spring market. This period has historically been the busiest for new home sales and many developers choose to launch new projects during this period to take advantage of the greater interest.

Weighed against the dynamic market conditions prevalent in 2007, the upcoming year should be much more steady and consistent, marking the return to more historical price and sales growth rates. New multi-family prices are expected to rise in 2008, albeit at a much more modest rate, with most forecasts calling for growth in the low single-digits, between three to five per cent. Keep in mind that given the growth in absolute prices since 2005, a price gain of five per cent represents an absolute growth of over $15,000 on the average condo, so the opportunity for a good return on your home or investment is still possible, even in the quieter market. Sales are expected to be comparable to 2007, with a number of new projects entering the market, introducing new housing options throughout Calgary. With single-family home prices now beyond the reach of many first-time homebuyers, multi-family homes offer consumers excellent value, through lower comparable prices, almost no maintenance costs, and a wider variety of building and floor plan options. Compared to the resale market buying a new multi-family home can be more affordable and easier to budget, with no renovation or upgrade costs, very low maintenance fees, and the security of a new home warranty.

Despite the higher levels of inventory available on the resale market, the new multi-family market within Calgary is expected to grow in popularity and demand over the next five years, with 2008 looking to be a positive year. Calgary’s economy is still one of the top performers in Canada and the city is expected to continue to grow, with new migrants moving to the region to take advantage of the excellent job market and strong wage levels. This population growth will continue to support new housing development and means buying a new home in Calgary should continue to be a wise investment.