A PAUSE IN MOMENTUM THE CALGARY UA TAKE - SECOND QUARTER 2020 - Urban Analytics
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A PAUSE IN MOMENTUM THE CALGARY UA TAKE – SECOND QUARTER 2020
2
UA Take – Q2-2020 – A Pause in Momentum
The peak of the COVID-19 pandemic and subsequent work from home orders occurred
throughout the majority of the second quarter which resulted in a temporary ‘pause’ in
momentum of Calgary’s new multi-family home market. As political and business leaders
around the world work to restart the economy in a safe manner, the current economic climate
will continue to impact the short term uncertainty in Calgary’s multi-family real estate market.
Both the new and re-sale sectors of the market were forced to rapidly adapt to an online or by-
appointment only sales format during the first few months of the COVID-19 lockdown. Many
developers closed their presentation centres entirely and as a result, the typical second
quarter traffic occurred for only one month during the quarter.
It is important to take the current economic and global conditions into account when assessing
the second quarter results of Calgary’s new multi-family home market. A total of 472 new multi-
family homes sold in Calgary in Q2-2020. This 28 percent drop compared to the first quarter
and 35 percent decrease from the same quarter last year can be largely attributed to most
project sales centres being closed for two months of the quarter.
There were some positive indicators for Calgary’s new home market despite the numerous
negative headlines and new stories in the media. Wood frame condominium sales were up by
four percent when compared to Q1. Further, three sub-markets recorded more sales than the
previous quarter; Eau Claire/West Village, the Inner Southeast and Airdrie. Another promising
highlight is the Outer North and Outer South sub-markets, which reported a total of 340 new
home sales in the second quarter. Many developers have reacted to shifting market conditions
by either converting their respective projects into rental housing or holding off on the release
of additional supply. This has helped narrow the differential between total unit sales and
released and unsold inventory in the market.
Many developers have also seemed to adequately navigate the heightened consumer
sensitivity by deploying a variety of price-reducing incentives. These incentives have been area
specific and have improved sales activity in most locations.
Some key statistics and observations from UA’s Q2-2020 update of the new multi-family home
sector of the Calgary Market include:
• Wood frame condominium sales increased by four percent compared to Q1-2020.
• Townhomes continue to be an attractive option for buyers, contributing to 57 percent
of total sales during the quarter.
• Outer sub-markets continue to attract buyers seeking value and affordability.
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20203
• Eau Claire/West Village, the Inner Southeast, the Outer South, and Airdrie sub-markets
all experienced quarterly sales increases.
• Released and unsold inventory levels were down across all sub-markets and down by
a total of 11 percent when compared to last quarter.
• Total standing inventory in the market decreased by two percent compared to last
quarter. Standing inventory in the Outer South sub-market was down by 27 percent
from the previous quarter.
• Consumer urgency for move-in ready units emerged as a new trend as end user
buyers sought to capitalize on favorable lending rates, pricing, and available
incentives.
• Sale prices sought for all product types appear to have been adequately adjusted to
meet the higher price sensitivity among consumers, thereby keeping qualified buyers
actively engaged in the market.
• First and second-time home buyers with secure employment situations were the
primary purchasers in the second quarter.
• There has been a reduction in the amount of downsizer buyer traffic as this purchase
group continues to wait for more favorable conditions in the single family sector of the
market.
Sales and Inventory Analysis
Chart 1 shows the total quarterly sales for Calgary’s new multi-family home market. A total of
472 units were sold in Calgary throughout the second quarter of 2020, which is a decrease of
28 percent compared to Q1and is 35 percent lower than the same quarter last year. Urban
Analytics defines the second quarter of the year as March through May, which happened to
coincide with the peak of the COVID-induced lockdown and effectively reduced the total
amount of sales that otherwise would have occurred throughout the course of the quarter. It
can be reasonably assumed that 472 of the total sales in the second quarter were achieved
throughout May as the majority of presentation centres were closed in March and April. It was
also the consensus among project representatives that traffic increased considerably after
COVID restrictions were gradually lifted.
The concrete condominium sector has been the most negatively impacted by the current
economic and buying environment as second quarter sales were down 62 percent compared
to the same quarter last year. This also was the case for the majority of the downtown and inner-
city sub-markets, which have a combined total of 18 actively selling concrete condominium
projects. 167 total wood frame condominium sales were recorded in the second quarter, which
is up by four percent from the previous quarter. Townhomes comprised nearly 57 percent of
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20204
total unit sales, which is typical for the Calgary market. The majority of townhome sales
occurred in the Outer North and South sub-markets.
QUARTERLY SALES COMPARISON
1,284
1,039
1,016
988
934
928
831
811
805
792
772
750
739
729
717
715
715
684
659
634
628
617
550
544
491
472
466
Chart 1
Sub-Market Sales Activity
While second quarter sales declined by 35 YOY Sales Comparison by Sub-Market
percent when compared to the same quarter Sub-Market Q2-2019 Q2-2020 YOY
last year, four sub-markets did experience an BL/EV 39 5 -87%
increase in year-over-year sales. Two EC/WV 3 13 333%
notable sub-markets that experienced an Inner NW 50 12 -76%
increase in sales activity were Eau Inner NE 34 18 -47%
Claire/West Village and the Inner South East. Inner SW 64 30 -53%
Inner SE 5 12 140%
An example of relatively strong performance
Outer North 326 172 -47%
was Grosvenor’s Avenue project in the
Outer South 153 168 10%
Downtown West End community and
Airdrie 36 37 3%
Remington Development Corporation’s The
Cochrane 19 5 -74%
Gates II project in Quarry Park, which
Total 729 472 -35%
recorded 12 and 13 new sales in Q2,
respectively. Sales activity at Avenue and The Gates II are noteworthy as projects in these sub-
markets have recorded very few sales over the past year. It should be noted that Q1-2020 sales
volumes were generally inflated due to the mass investor sale of Minto’s Era Condominiums
project in Bridgeland. Excluding Era’s unit absorptions, quarterly unit sales decreased by just
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20205
eight percent when compared to Q1-2020. Considering that lockdown restrictions were not
lifted until early May, there is encouraging evidence of reasonably strong demand for new multi-
family home product in Calgary.
YEAR-OVER-YEAR NEW MULTI-FAMILY HOME SALES
400
350
300
250
200
150
100
50
0
Inner City Outer South Outer North
Chart 2
Suburban Sales Maintained with Declines in Urban Areas
The Outer North and Outer South sub-markets continued to perform well and accounted for 71
percent of overall sales in the second quarter. Airdrie and the Inner Southwest accounted for
15 percent of overall second quarter sales, or eight and seven percent, respectively. The most
notable decline in sales occurred in the Inner NE and Inner SW sub-markets.
QUARTERLY SALES BY SUB-MARKET COMPARISON
189
165
164
164
155
85
37
30
19
18
18
13
12
12
12
12
5
5
5
0
BL/EV EC/WV Inner NW Inner NE Inner SW Inner SE Outer Outer Airdrie Cochrane
North South
Chart 3 Q1-2020 Q2-2020
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20206
Notable projects in the Outer North sub-market include Cedarglen Living’s The Rise Condos at
Harvest Hills and Cardel’s Nolan Park Townhomes which accounted for 38 sales during the
quarter. Reasonable sales activity in the Outer South sub-market can be credited to strong
performance at Cardel’s Walden Place Building 6 and Avi Urban’s The Winston which
accounted for 29 sales during the quarter.
OUTER NORTH VS. OUTER SOUTH QUARTERLY SALES
370
336
326
320
313
305
296
295
291
287
285
269
267
253
243
241
239
235
223
208
204
202
201
197
189
187
172
168
163
155
153
129
Chart 4 Outer North Outer South
Wood Frame Condominium Sales Increase
QUARTERLY SALES BY PRODUCT TYPE
500
450
400
350
300
250
200
150
100
50
0
Concrete Wood Frame Townhomes
Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017
Q3-2017 Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020
Chart 5
Wood frame condominiums were the only product type to record a quarterly gain. A total of
167 wood frame condominium sales were recorded in Q2-2020, which is four percent higher
than last quarter. Concrete condominium sales were down by 83 percent from last quarter.
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20207
However, when the bulk investment sales at Minto’s Era Condo’s in Bridgeland are omitted from
Q1-2020 totals, only 19 fewer sales were recorded when compared to the previous quarter.
Townhome sales in the second quarter were down by just 20 units when compared to Q1 with
sales staff indicating that while many younger buyers were eager to purchase, few downsizers
are expressing interest in this product type.
TOWNHOME SALES CONDO SALES
23% 20%
34%
43%
34% 46%
Chart 6 Outer North Outer South Remainder
The Outer North and Outer South sub-markets represented 80 percent (57 and 77 respectively)
of the 167 total wood frame condominium sales recorded in the second quarter of 2020. These
sub-markets also accounted for 77 percent (115 and 91 sales, respectively) of the total 269
townhome sales throughout the quarter.
Released and Unsold Inventory Levels Decrease
Released & Unsold Inventory Change The adjacent table highlights the change in the amount
Sub-Market Quarterly of released and unsold inventory by sub-market
BL/EV -4% compared to the previous quarter. Total released and
EC/WV -21% unsold inventory levels are down 11 percent
Inner NW -7% compared to the previous quarter and can be
Inner NE -7%
attributed to a lack of new project launches along and
Inner SW -2%
the relatively high number of condominium projects
Inner SE -72%
converting into purpose-built rental buildings during
Outer North -14%
the quarter. All ten sub-markets across Calgary
Outer South -11%
experienced a decrease in released and unsold
Airdrie -14%
Cochrane -5%
inventory levels. The most significant change occurred
Total -11% in the Inner Southeast sub-market and is due to the 12
quarterly sales achieved at Remington’s The Gates II in
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20208
Quarry Park. The developer also set aside an additional five units in the project for a lease-to-
own program.
Chart 6 illustrates released and unsold inventory levels by product type. Released and unsold
inventory declined for all product types compared to the previous quarter with concrete
condominium, wood frame condominium and townhome product dropping by eight, nine, and
eight percent, respectively. Released and unsold inventory levels are also eight percent lower
when compared to Q2-2019.
RELEASED & USOLD INVENTORY COMPARISON BY PRODUCT TYPE
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Chart 7 Concrete Wood Frame Townhomes
Decrease in Standing Inventory
The number of completed and unsold new multi-family homes decreased by two percent, or 21
units compared to the previous quarter but is up 18 percent compared to the same quarter last
year. Sales staff have indicated that the majority of buyers who have shown interest throughout
the quarter are those who have a sense of urgency related to their purchase. Whether they are
looking to capitalize on the favorable mortgage rates, softer market prices, or the generous
consumer incentive programs being promoted by developers, it has been the consensus that
demand for move in ready product has increased. This mentality is different from previous
quarters where purchasers preferred to wait for six months to two years for their unit to be
available for possession. Further, qualified buyers in the second quarter were those who
displayed higher levels of job security and liquidity.
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 20209
STANDING INVENTORY TREND
1038
1007
956
935
897
876
852
848
816
805
792
773
758
744
732
687
518
457
312
242
214
Chart 8
ANTICIPATED INVENTORY BY PRODUCT TYPE
TOTAL UNITS RELEASED SOLD
172 64 86
180 172
328
468 468 269
Concrete Wood Frame Townhome
Chart 9
Based on research from UA’s NHSLive database, there are currently 13 actively selling projects
in Calgary under construction and anticipated to complete between August 1, 2020 and
December 31, 2020. These projects represent a total of 968 released units of which 419 are
pre-sold. As such, a total of 549 unsold units are scheduled to be complete before the end of
2020, which UA analysts anticipate will be absorbed assuming current market conditions
persist or improve.
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 202010
STANDING INVENTORY BY SUB -MARKET
285
251
238
225
195
189
79
74
63
50
43
42
34
27
22
20
19
13
11
11
BL/EV EC/WV Inner NW Inner NE Inner SW Inner SE Outer Outer Airdrie Cochrane
North South
Chart 10
The Outer North and Outer South sub-markets continue to have the highest level of standing
inventory in the city and represent 25 and 30 percent of total move-in ready units, respectively.
Standing inventory in the Outer South was up 27 percent (60 additional units) when compared
to the previous quarter. The Outer North experienced a modest five percent decline in standing
inventory levels when compared to last quarter.
Quarterly Sales vs. Unsold Inventory Differential
The differential between total unsold inventory and the number of sales at the end of Q2-2020
was 3,104 units, which is three percent lower than the previous quarter and down eight percent
when compared to the same quarter last year. The recent narrowing of the differential is due
to a combination of steady absorption rates in May as COVID restrictions were lifted, fewer new
project launches throughout the quarter and more condominium projects converting to
purpose-built rental. It is anticipated that in the coming months the differential between sales
and released and unsold inventory will continue to narrow as the existing supply is absorbed by
the market.
QUARTERLY SALES VS. UNSOLD INVENTORY
5,000
4,000
3,000
2,000
1,000
-
Chart 11 Total Sales Released Inventory Differential
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 202011 Pricing Trends The average unit price for new multi-family homes in Calgary decreased by 9.3 percent from the previous quarter and is down 4.2 percent from the same quarter last year. All product types experienced a decrease in average unit price compared to Q1. The largest decline occurred in the wood frame condominium sector where average prices for this product type were down by 9.7 percent compared to last quarter. Year-over-year average wood frame condominium unit prices have decreased by 7.8 percent while average townhome prices have increased by 2.9 percent over this same time frame. Average unit prices for concrete condominiums have decreased both on a quarterly and yearly basis while the average price per square foot values for this product type have increased. This implies that actively selling concrete condominium projects in the city have smaller unit sizes on average when compared to previous quarters. Developers have been implementing a combination of price reductions and incentive promotions to help generate sales activity. Marketing and promotion strategies have been unique to the communities and sub-markets in which projects are located and have considered the predominant demographic groups and their interests. A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 2020
12
Buyer Trends
There were a number of significant changes in buyer trends during the second quarter of 2020.
One of more notable trends was the number of entry level home buyers who were active in the
market. Young professional buyers who were in the fortunate position of having stable work
and financial qualifications took advantage of low interest rates, softer market prices and
appealing incentives being offered by developers. These buyers have shown most interest in
move-in ready units and have contributed to the decline in standing inventory levels in the new
home market. There has also been an increase in buyer interest from investors looking to
capitalize on the strong rental demand in the city. Downsizer/empty nester interest remains
soft as it has been anecdotally reported that this buyer group is more concerned with the
personal health risks of buying and selling during COVID-19. Another reason for low demand
from this group is the softened state of single family home prices negatively impacting
purchasing power as these buyers typically need to sell their current residence before
purchasing a new condominium or townhome.
New Project Launches
There were five new significant project launches in Q2-2020:
• Fortress Real Estate Developments launched Brio Bridgeland in the Inner Northeast
submarket. The boutique, 15-unit condominium project is seeking an overall blended
price per square foot of $463. Upon purchasing, each homebuyer will receive free
TELUS or Shaw packages for one year, 3 hours with an interior designer (in house or of
purchasers choice) and a “Welcome to Bridgeland” care-package, promoting local
businesses and creating a sense of community in Bridgeland.
• Truman Homes launched Arcola in Spring Willow in the Inner Southwest sub-market.
The project consists of 87 units and features modern, New York themed exterior
architecture. The project is listed at an average of $511,588 (or $302 per square foot) in
price. There are no incentives being offered at this time.
• Truman Homes also launched Street Towns at Timberline Estates in the Inner
Southwest sub-market. This project features 40 units and has a similar architectural
style as Arcola in Spring Willow. Units at Timberline Estates are estimated to average
$601,818 ($294 per square foot) in price.
• Homes by Avi launched Wildflower in Springbank Hill in the Inner Southwest sub-market.
This townhome project consists of 74 units and will feature a central courtyard for
residents. The project is listed at an average price of $429,510 (or $309 per square foot).
Homes by AVI is currently offering $10,000 in design center allowances for the first 11
units sold.
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 202013
• Partners Development Group launched Central located in Skyview Ranch in the Outer
North sub-market. This townhome development will consist of 99 units and is adjacent
to a natural ravine. The project is seeking an average price of $251,328 (or $224 per
square foot). The developer is currently offering four different incentive options:
o free 2nd full bathroom;
o up to $5,000 in upgrades;
o 1-year free condo fees; or,
o deluxe appliance package that includes a gas stove, upgraded hood fan, and
Whirlpool 19.6 cu ft fridge.
1-year free condo fees will be combined with the other incentives.
All recently launched projects have open presentation centres and display suites staffed
with sales representatives.
UA continues to closely monitor the contemplated sector of the new multi-family home
sector of the residential market in Calgary and anticipates that projects will slowly continue
to launch as the easing of social distancing measures continues in Alberta. During the Q2
tours, it was observed that most of the presentation centres had reverted back to pre-
COVID open hours by the second week of May. Additionally, sales representatives
indicated that first-time buyers seeking affordable and spacious townhomes were more
active and brought some confidence back to that sector of the market. The following
represents some notable projects that are anticipated to launch in Q3-2020:
• Carrington South Condominiums (Carrington – Outer North)
• Redstone Park Townhomes (Redstone – Outer North)
• Aspen Woods Condominiums (Aspen – Inner SW)
• Sage Walk by Logel Homes (Sage Hill – Outer North)
• Livingston Townhomes (Livingston – Outer North)
• Belvedere Townhomes (Outer North)
• Cornerbrook Townhomes (Outer North)
• Concord Two Condominiums (Downtown)
• Montgomery Court Condominium (Inner NW)
• Harmony One (Inner NE)
• Panorama Townhomes (Outer North)
• Elliston Townhomes (Outer South)
• Savanna in Saddle Ridge (Outer North)
A PAUSE IN MOMENTUM: CALGARY UA TAKE – SECOND QUARTER 202014
UA analysts will continue to closely monitor activity at new multi-family home project
presentation centres as the economy continues to re-open during the second half of 2020 and
look forward to reporting the results to you after their Q3 tours of the Calgary market.
ALBERTA STATE OF THE MARKET
UA is currently working on the second quarter ALBERTA STATE OF THE MARKET report, which
provides an aggregate summary of the status of new home markets in Edmonton and Calgary
and economic metrics relevant to the housing industry. CLICK HERE to download the first
quarter report.
Tell us what you think and what you need
We appreciate your feedback. Please contact us with any questions regarding this UA Take or
any of our other periodic publications. In addition to maintaining the most current new multi-
family home and rental apartment project data on NHSLive.ca, UA provides advisory and
consulting services that can be tailored to meet your firm’s specific needs. Please contact us
to discuss how we can assist you in the design or positioning of your new multi-family home
community.
info-alberta@urbananalytics.ca
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