Calgary Real Estate Blog

This winter’s been a cold, snowy one: indeed, December saw more of the white stuff hit the ground than has fallen in 112 years. There have been chinooks, sure, and they’ve been glorious, but sadly they’ve also managed to cause problems thanks to the record precipitation. While, most years, a good chinook will dry everything else and ‘reset’ the city, this season those warm few days are just melting top layers enough to create treacherously icy sidewalks and roads that can be near-impossible to navigate safely. Just in my neighbourhood, I’ve seen more people land on their keister than any year I can remember, and hospital workers are reporting two or three times more people are showing up with sprains and breaks thanks to falling on ice than usual for this time of year. Tragically, a woman was found dead last week in Edmonton after what police suspect was a slip on the icy sidewalk.

All of this should serve as a reminder – or a provocation – to know and live up to your responsibilities when it comes to keeping the sidewalks safe in front of your house. According to city bylaws, homeowners are expected to clear their sidewalks of snow and ice within 24 hours, or else risk having the city do it at the homeowner’s expense. Staying on top of your clearing duties (as opposed to putting it off through a three-day snowstorm) can make it lighter work, and a bag of sidewalk salt, sand, or kitty litter is a lot cheaper than the deductible on your liability insurance if someone sues you for slipping; it comes down to the safety of your neighbours, their kids, their elderly parents.

We all like to complain – and justifiably so – about the insane snowpack in our suburbs this year, but all homeowners (and good natured renters too) can help make Calgary’s sidewalks a whole lot safer just by spending a few minutes with a shovel.

Just prior to the civic election, an article appeared in the Calgary Sun, furnished by the Canadian Home Builders Association – Calgary Region (CHBA-CR), raising the old arguments of a lack of serviced land in the city. The article ominously predicts the city will run out of serviced land by 2018, and bedroom communities such as Airdrie will be the only hope for those looking to purchase new homes.

However, a joint statement released last March by both Mayor Nenshi’s office and the very same CHBA-CR responsible for the Sun article detailed how Calgary currently had 22 square kilometres of serviced land available for new developments – enough for six new Auburn Bay-sized communities – with another 28 square kilometres planned for approval by the end of 2014. That remains as true today as it did seven months ago.

So, now that the election’s over, lets all just calm down and enjoy the fantastic shape our city’s in, the high quality of life Calgarians enjoy, and the wide diversity of new and longstanding communities in which we can raise our families.

Interesting article in the Calgary Herald recently posits that the now-moving-ahead southwest portion of the ring road could dramatically increase property values in nearby neighbourhoods. Especially encouraging, from a homeowner’s standpoint, is the fact that much of the land being discussed is already developed, meaning it’s owners themselves – not developers – who’ll see the profit.

It all comes down to accessibility. Commuting in Calgary’s not bad at all compared to other major markets, and thoroughfares like the ring road just make getting to work from the burbs that much easier. Anytime you can combine efficient access to services and workplaces with the quiet suburban lifestyle available near our city’s limits, you’re going to see values increase.

Of course, it’ll be years before the ring road is finished. I’ll be interested to see how many people build and buy in areas that will eventually be near the completed freeway in a short term pain, long term gain strategy.

One of the major advantages of buying a new, as opposed to previously owned, home has long been the warranty coverage.  To some buyers’ chagrin, however – especially those buying homes in the mid-2000s, when labour shortages occasionally led to substandard subcontractor work – the warranty coverage maxed out at a mere 12 months. Issues that didn’t show themselves within that one year window became the homeowner’s responsibility. The vast majority of homes in Calgary are, and have been, built to high standards that lead to extremely happy homeowners. For the unlucky few, however, the short warranty has been problematic.

New home buyers can rejoice, then, as the new year will bring with it the Alberta New Home Buyer Protection Act, a piece of legislation aimed at raising the standard of construction in our fine province, making builders increasingly accountable for the products that they sell. Details are available here, but the highlights include a minimum of ten years’ coverage on major structural components, and five years of building envelope protection (with the mandatory option for homeowners to be able to purchase additional coverage).

Now, labour and materials still fall under one year’s worth of coverage, but in certain cases that coverage extends to two years, so there’s progress even on this front.

Is this Act the ideal level of protection for all new home buyers? No, of course not. It would be nice to see labour and materials be covered for longer periods of time. It’s certainly a step in the right direction, though.

With the civic election just weeks away, city planning is a hot topic of conversation in the media thanks to a rather scandalous video taped surreptitiously at a home builders’ meeting earlier this year, with city aldermen called out for being friendly or unfriendly to developers’ interests, and the not always amenable relationship between our mayor and the Home Builders’ Association.

That’s led to some pretty serious propaganda surrounding Calgary’s housing market, including a website launched mid-September by Common Sense Calgary that warned of city planners making Calgary unaffordable for our children, citing the high price of property in Vancouver as an example of what we can look forward to.

Don’t be fooled; we’re not Vancouver. There is already a great deal of land within Calgary city limits set for new neighbourhoods to be constructed, neighbourhoods that will offer starter homes at relatively affordable prices. According to the Royal Bank Affordability Index, which measures how much of an average family’s income would be taken up by housing costs, Calgary is one of the most affordable major cities in which to own a home in Canada. Our affordability index is 33.6 percent. The national average is 48.4, and Vancouver’s is a whopping 85.8. And these are 2013 numbers, as we’re in the midst of a seller’s market.

Why are homes so expensive in Vancouver? Well, the obvious answer is it’s a coastal city, so land is at a premium. Add to that, the commute for people who work in Vancouver but live in the neighbouring communities – Burnaby, Langley, and so on – is hellish, so a small house in the city is still extremely appealing. Compare that to Calgary, a city built on the prairie with so much land we have the country’s largest green space (Nose Hill Park) in our city limits. Suburban life here doesn’t mean commutes of three hours each way; someone can live in Tuscany and still get to work downtown in under 45 minutes during rush hour. Plenty of residents of Airdrie, Cochrane, and even Didsbury happily commute daily, with travel times a fraction of those for commuters to Vancouver.

So, no matter what you think of Calgary’s city planning, or whether you approve or disapprove of the way the mayor’s office relates to home builders, don’t be swayed by the fear tactics employed by a special interest group looking to influence the upcoming election. Do your own research, and judge on facts, not hyperbole.

One of the many great things about Calgary is its extensive pathway system, and it is well used. Offering riverside views and protection from the wind, thanks to densely planted trees, the paths present a place to walk, run, bike, and toboggan in almost every community. Sadly the Great Flood damaged nearly one hundred kilometres of pathway, to the extent that these sections had to be closed. Thanks to well coordinated efforts by city staff, a whopping 57 kilometres have been reopened. The remaining portion, however, will take some time to fix up. There are a number of factors slowing things down, including eroded riverbanks, fish habitats, and ownership considerations, but as the province continues to inject money and staff continues to work exceptionally hard, things will be back to how they were as quickly as possible.

When you’re taking your next fall stroll after supper, have a look around at our great pathway system and consider how fortunate we are to have had city planners take greenspace so seriously.

City council has been debating what I expect will be a hot topic in upcoming civic elections: secondary suites, where they can be, and how easy they should be to add to the market. Mayor Nenshi was pushing for major revisions to laws around the suites, but the majority of council preferred small, incremental changes: secondary suites damaged in the flood that had been grandfathered in, for example, can be rebuilt without rezoning, for example, much to the relief of the overwhelmed rental market. And a pilot project has been launched to inspect secondary suites for safety and adherence to code, which should come as a relief to tenants looking at their single window and wondering if they could actually crawl out of it in a fire.

So, good stuff, if perhaps not particularly groundbreaking. With the sales market in Calgary as hot as it is, with prices up more than eleven percent over last year, though, there are bound to be more residents looking to rental properties as a stopgap until deposits can be saved up – and plenty of investors will want to be capitalizing on their property holdings by adding basement suites for additional income. Surely once debates begin in the aldermanic races, lines are going to be drawn showing where each candidate stands on increasing our city’s stock of secondary sites, and that could seriously affect outcomes in ridings popular with, say, university students. This is a topic to watch.

I’m often writing/bragging about how well the real estate market is doing locally, and with good reason: it’s on fire like we haven’t seen in eight years. But it’s encouraging to hear some good news coming in from around the country, especially major markets like Vancouver and Toronto.

The Conference Board of Canada predicted today that the condo market is unlikely to plummet, even in Toronto where there has recently been concern about an abundance of new multi-family dwellings being built. While things may cool a bit, especially if interest rates rise, the Conference Board concluded that banks were doing a good job of keeping construction from getting out of control by virtue of construction loans being contingent on pre-sale thresholds, and growing populations in metropolitan areas will continue to be on the lookout for condos.

And the Canadian Real Estate Association is talking about Vancouver’s market growing nearly ten percent year-over-year for July, while Toronto’s up almost thirteen percent.

So, while we’re leading the charge thanks to generous incomes and a growing population, ours isn’t the only city with busy Realtors. I love good news.

Thanks to the busier than expected real estate market this year, CMHC – the government-backed outfit that offers insurance against mortgages when down payments of less than 20 percent are made – has already reached three-quarters of its cap for the year. The government had allowed for up to $85 billion in mortgage-backed securities to be issued in 2013, and we’ve already hit nearly $64 billion.

What does this mean? Well, the government will want to cool down the market a bit by implementing new rules that make it more difficult to qualify for a mortgage. Further, fixed rates on mortgages will likely be going up, with jumps of between 0.2 percent and 0.65 percent by the fall.

It’s going to become harder to be a pre-approved buyer, which means those who have pre-approval will become highly valued by sellers. Really, that’s one of the first things you should do if you’re entering the real estate market: get pre-approved, so you know what you’re working with and the seller knows you’re serious.

None of this is especially surprising or dire, but it’s well worth being aware of. As more develops, I’ll keep you posted

The impact to the city from last month’s flooding continues to make itself felt, aggravating an already serious shortage of rental spaces. As rental vacancy rates approach zero percent, properties that had secondary suites grandfathered in are now having to be rebuilt according to current zoning, meaning those suites are gone for good.

Alderman John Mar proposed a mass approval of secondary suites to ease the rental crunch, but that proposal was defeated (although, not by much); it is sure to be raised again in the lead up to this fall’s municipal election. The City, since 2009, has been offering homeowners in appropriately zoned areas grant money to create secondary suites, handing out $9 million in three years. Including illegal dwellings, there are well over 60,000 secondary suites in Calgary.

Some people love secondary suites: they’re a great way to generate income from a property, and provide quality accommodations for quiet students and working singles. Others cite traffic concerns and a loss of ‘community feeling’ when more renters enter a neighbourhood. How do you feel? Has the flood, and its fallout, made you more agreeable to having secondary suites permitted where you live?