Calgary Market Setting Records – And You Thought 2012 Was Good

Posted by Alan Zunec on Tuesday, August 27th, 2013 at 12:37pm.

2012 was good, great, even smashing in the Calgary real estate world. By August 6 of last year MLS sales almost reached $6 billion, yes that is billion with a “B.” This year the city has already blown past that milestone, chalking up over $6.8 billion in MLS sales by that very same date. Needless to say the Calgary Real Estate Board is thrilled.

By the time New Year’s Eve rolled around in 2012, Calgary real estate sales totaled more than $9.1 billion. Those numbers have only been seen two other times in the city. The first was in 2006 when a record $9.9 billion was generated, and the second was the record year of 2007, when the cash register peaked at $11.3 billion. It’s anyone’s guess where the numbers will end up once the clock strikes midnight to welcome in 2014.

The increasing sales trend was in some ways anticipated. Rental vacancy rates in Calgary have been hovering around the one percent mark, thanks to the influx of people answering job ads and creating start up businesses of their own. The inner city is a particularly desirable area, notably with the younger crowd who are trending towards living closer to work, entertainment and shops.

The push to live in the suburbs is not as strong as it once was, offset by the ever increasing commute times into the city. For the longest time Calgary was building out. Now the city is revamping the downtown core and close in neighbourhoods in more of a building up scenario. Condos are fast becoming the home of choice and are bringing in on average $500 to $600 per square foot in or near Calgary’s core. The competition has drawn multiple bids on many properties, insuring a higher sales price. Lots alone, when you can find them in the downtown core, are selling for well above listed price thanks to the competition.

The industrial real estate market in Calgary is also doing quite well, enough to make the city one of the best performing markets within North America during 2013’s second quarter. Leasing activity is increasing and as of this writing some 2.7 million square feet have been snapped up. Just as there is competition in the housing market, those wanting to get into industrial space face stiffer competition.

Chris Saunders, who is Cushman & Wakefield’s senior VP for Calgary, noted that at the current pace the available lease space will be absorbed rather quickly. Companies already in town, particularly those associated with the old sands and energy related fields, are increasing their presence. New players in that industry and supporting fields are also arriving, thanks to Calgary’s boisterous economy.

Calgary also has a reputation as a major hub for Western Canada. The Calgary International Airport offers service to and from many domestic and international destinations. It’s easy to hop on a plane and be in Vancouver, Toronto, Honolulu or Tokyo in a reasonable amount of time. Access to rail service and Canada’s highway system provides two more ways to transport people and goods.

Face it, Calgary has a lot going for it. As long as the city can keep up with the industrial leasing and housing demands it will continue to be a major player in Western Canada and beyond. Now it’s up to the builders to keep pace with those demands. How’s that saying go? “If you build it, they will come.”  So far in Calgary, that is the absolute truth.

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