The price of a townhome in Calgary is rising and leading the country as the city faces population growth and demand in the housing market.
According to a report from real estate firm ZooCasa, the price of a townhome in Calgary is rising faster than anywhere else in Canada, with the average price rising 17 per cent from last year to $458,100.
ZooCasa examined the average price of a townhome in 20 Canadian cities and compared the difference in prices between February 2024 and the same month last year.
In comparison, Edmonton’s townhome prices increased year-over-year by 10.3 per cent to $245,900.
“I think probably the Canadian dream for most people is that they want to have a detached home at some point in their lives, if they want to have a family,” said Tom Albrecht, realtor with RE/MAX First. “If we’re at a loss for affordability, people typically move to townhomes, especially if they’re starting out or downsizing.”
According to the Calgary Real Estate Board (CREB), 483 townhomes were sold in the city this April, an increase of 16.1 per cent compared to the same period last year.
Latest news from Canada and around the world
As it happens, it will be sent to your email.
Mark Neustedter, a Realtor with EXP Realty, said the townhome market is becoming more accessible than single- and semi-detached homes due to lower minimum down payments.
ZooCasa reports that the five per cent down payment for the average townhome in Calgary is $22,905, while the minimum down payment on a single-detached home is more than $50,000.
“When you’re talking about severance, it’s a completely different world, there’s a spread of hundreds of thousands of dollars out there,” Neustadter told Global News. “If you’re looking at a first-time home buyer, five percent down is probably a reasonable mortgage payment, even with interest rates the way they are right now.”
However, supply continues to decline and CREB says most of the decline is due to lower priced homes coming onto the market.
“Our total supply level is under $400,000, that’s about 40 percent of the row houses were under that price range. Now, only 20 percent or so,” CREB chief economist Ann-Marie Lurie told Global News. “We’re really seeing a shift, there’s a lot less affordable product for that row style property.”
This marks a record year for housing construction in Calgary, with more than 15,393 homes built in the city in 2023; 11 percent more than last year.
Construction of multi-residential homes increased by 49 percent during 2022, while development of secondary suites increased by 43 percent.
“A lot of those starts were on the higher density side, so we saw a lot of line construction, we’re seeing more affordable product coming into the market to meet that demand,” Lurie said. “It’s just a matter of how long it takes to get that thing done.”
Calgary’s mayor says dwindling supply is a factor motivating a city-wide rezoning proposal, which has entered its third consecutive week of public hearings at City Hall.
The proposed change is one of more than 80 recommendations City of Calgary Housing StrategyWhich would include amending the default residential zoning district to include more housing types such as rowhouses and fourplexes.
“People who are entering the market can afford townhomes, and that’s why we have to have more of that product to make sure people can really get what they need,” Gondek said. “That’s what we’re talking about in terms of increasing supply.”
However, experts say it may take some time for supply to match demand.
“Supply should eventually catch up,” Albrecht said. “But building houses takes time, especially when builders are struggling for labour.”
©2024 Global News, a division of Corus Entertainment Inc.