Real Estate

Calgary Condos: Yay or Nay?

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  • May 19th, 2021 11:36 pm
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[OP]
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Jan 26, 2016
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Toronto, ON

Calgary Condos: Yay or Nay?

Would now be a good time to invest in Calgary Real Estate, especially condos?

Would love feedback from anybody living there.
27 replies
Member
Jan 31, 2007
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WinterSleep wrote: Would now be a good time to invest in Calgary Real Estate, especially condos?

Would love feedback from anybody living there.
I live here. I wouldn’t buy a condo. There’s way too much on the market and more coming.
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Aug 17, 2012
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Temujin1 wrote: I live here. I wouldn’t buy a condo. There’s way too much on the market and more coming.
I agree with this , although I dont live in Calgary but pretty familiar with Prairie's market .. Condo in Prairie's is not a good option
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Nov 13, 2013
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Temujin1 wrote: I live here. I wouldn’t buy a condo. There’s way too much on the market and more coming.
First part for sure but this just reflects the prices. They are probably lower than construction cost in Toronto. The second part I’m not sure. I don’t see a lot of construction at least downtown high rises. Or so you mean all the builder inventory they still haven’t sold ?

Is downtown Calgary not a desirable place ? Seems with WFH and recovery in oil it has a lot of upside.
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Dec 13, 2016
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I noticed condo fees and property taxes in both Calgary and Edmonton are going up by a lot.

Condo fees, typical bait and switch for new construction, so looking at older projects where typical condo fees are over around $1000 for a 2 bedroom, it doesn't look good long term.

Alberta government needs taxes, so I guess they will go up even more.

I like Calgary and looking to buy condo there myself, but I am noticing the bad trend.
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BiegeToyota wrote: I noticed condo fees and property taxes in both Calgary and Edmonton are going up by a lot.

Condo fees, typical bait and switch for new construction, so looking at older projects where typical condo fees are over around $1000 for a 2 bedroom, it doesn't look good long term.

Alberta government needs taxes, so I guess they will go up even more.

I like Calgary and looking to buy condo there myself, but I am noticing the bad trend.
New builds are bait and switch for sure. I don’t know Alberta law but in Ontario once they do a reserve fund study barring insurance problems usually it’s pretty stable. Full time security is expensive but otherwise it’s mostly decent value and a forced savings plan.

Property taxes is a good point as the province has had artificially low taxes for awhile and something will have to give.

I’m also tempted but maybe we are all naive with our comparison to Ontario. How are prices compared to Oklahoma or some other similar sized city on a flat endless plain?
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Mar 2, 2017
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There has been a massive marketing campaign from Calgary to push their projects here in Toronto and it's working, they provide rent guarantees, low payments, and obviously much cheaper prices than GTA projects.

I think it may work if you are seeking cashflow, from my little bit of deep diving the rental market there is decent so you are effectively buying the cashflow. It's the appreciation that's questionable for me and that's where all the money is.

I'd be open to consider the idea, but probably not something I'd personally get into.
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Dec 9, 2007
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To invest? Probably not. To live in, yes.

From 2018 to 2021 condo prices have not been kind to owners. We are talking about 10-15% drop during this period. For example, I agreed to purchase a condo recently (low-rise, new-ish build) and it was $318K in 2021, and in 2018 it was $367K.

At that price that I went in at, it was basically the same price as rent including condo fees and property taxes. Even if the value continues to drop, well i'd be paying the same if I was renting anyways. So figured it was a good time to buy.

I had to go with a condo as I am absent a lot. Hard to maintain a place when you are gone for months at a time.
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May 10, 2020
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WinterSleep wrote: Would now be a good time to invest in Calgary Real Estate, especially condos?

Would love feedback from anybody living there.
Condos are easy to maintain/manage in calgary while living in GTA. I am in GTA as well and extensively looked at Calgary. Overall, the market there is showing some promise - but its not going crazy and there is so much in the Condo space - and thats why you have all these rental guarantees etc. There is so much supply in condos - and prices have hardly moved for the last 7-8 yrs - which also shows how inflated they were 8 yrs ago. Illiquidity in condos is high - things easily sit on the market for 90+ days and even with good cap rates dont sell easy. While calgary has a decent population (1M ish) its 14/th or 1/5th of GTA and the land mass is not any less and people who have no issues driving further out.

The most desirable pockets are not in the core but on the western sides of the city where there are not that many condos. Their freeholds started appreciating this year, but much of it is just low rates. What calgary really needs is jobs and for that they need energy to pick up. You are really just making a bet on energy - and with a house you might do ok, but no its not easy to manage that from GTA especially in a city where weather can be quite punishing leading to issues with the house.

No pain, no gain.
[OP]
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Jan 26, 2016
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Thanks for the comments.
  • I am less concerned about the current trend. Even GTA condos were stagnant up until a few years ago. And the idea is to buy pre-construction with the hope that things pick up in the future.
  • With prices going up across the country, would Calgary be a good candidate for people to move to? Just like people are moving to Texas from California for tech companies, could the same trend happen for Calgary?
  • How bad is the weather compared to GTA?
  • Obviously we are looking for deals so if prices are down right now that is not necessarily a bad thing. What am I missing? Won't some people and companies eventually move from GTA's insane prices to lower priced metropolitan cities? Forget Montreal as it's French and Quebec is not business-friendly. Leaves out Vancouver and Calgary. And Vancouver is already expensive. What am I missing?
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Feb 1, 2012
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Maybe Ottawa is a better choice than Calgary? Population wise they are similar but Ottawa is more insulated with the federal govt. Tech wise Ottawa is also stronger than Calgary afaik. Deals can still be found in Ottawa for condo and easier to manage from GTA but I'm not familiar with Calgary at all.
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Oct 22, 2019
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For Prairies, condos are not the best use of your capital. My buddy bought a brand new 2bd 2 bath condo in Regina in 2013 for 275k and right now, the same condo is selling for around 190k.

Freehold properties would be better use of your money since land is pretty cheap in the prairies not like GTA Face With Cold Sweat
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Jan 31, 2007
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fogetmylogin wrote: First part for sure but this just reflects the prices. They are probably lower than construction cost in Toronto. The second part I’m not sure. I don’t see a lot of construction at least downtown high rises. Or so you mean all the builder inventory they still haven’t sold ?

Is downtown Calgary not a desirable place ? Seems with WFH and recovery in oil it has a lot of upside.
Construction costs, excl land, i believe are actually higher than Toronto. This is the downside of the O&G dutch disease. Is downtown Calgary not a desirable place? Well, without O&G office workers, i don't feel it has a lot going for it. Why buy a condo when you can get a house in the burbs if you're working from home. I don't see it increasing but i'm not remotely qualified to forecast this. I just know that in the sprawl that is Calgary, there is no shortage of space, hence no real incentive to build up.
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Jan 31, 2007
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BiegeToyota wrote: I noticed condo fees and property taxes in both Calgary and Edmonton are going up by a lot.

Condo fees, typical bait and switch for new construction, so looking at older projects where typical condo fees are over around $1000 for a 2 bedroom, it doesn't look good long term.

Alberta government needs taxes, so I guess they will go up even more.

I like Calgary and looking to buy condo there myself, but I am noticing the bad trend.
Property taxes are municipal, not provincial. Calgary actually had a surplus this year in its budget. Not saying government won't find additional ways to tax us but the Alberta gov't is not the direct driver of your property taxes.
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Nov 13, 2013
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kwanyeung20 wrote: Maybe Ottawa is a better choice than Calgary? Population wise they are similar but Ottawa is more insulated with the federal govt. Tech wise Ottawa is also stronger than Calgary afaik. Deals can still be found in Ottawa for condo and easier to manage from GTA but I'm not familiar with Calgary at all.
Well Ottawa already booming. Condos lagging but same issues with lots of land. Prices lagging but still maybe twice Calgary even if still half Toronto. Ottawa is a defensive play with Gov't jobs but that is already baked in. Traditionally the two cities had similar prices but diverged with oil drop.
Temujin1 wrote: Property taxes are municipal, not provincial. Calgary actually had a surplus this year in its budget. Not saying government won't find additional ways to tax us but the Alberta gov't is not the direct driver of your property taxes.
Yeah but if they download to the cities (a la Harris in the 90s) which is a good option for blaming another level of government property taxes will have to rise.
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JD_Inv wrote: For Prairies, condos are not the best use of your capital. My buddy bought a brand new 2bd 2 bath condo in Regina in 2013 for 275k and right now, the same condo is selling for around 190k.

Freehold properties would be better use of your money since land is pretty cheap in the prairies not like GTA Face With Cold Sweat
For a lot of condo dwellers in Vancouver and Toronto, I feel condo living is a function of affordability rather than life style choices. Until a suburban TH reach the $700k-800k mark, I feel for a lot of people, growing up in North America, they will still prefer to live in a home where there is a backyard and a driveway similar to what they grew up in.

All to say, if I'm looking to "invest", I will look into entry level freehold towns or small singles as I feel they will appreciate more if Oil actually goes into a supercycle. After all, it seems oil has found a footing in the $60 range. As the economy opens up in a few months and people start travelling around, I will not be surprise it will goes up another $20/barrel.

For me, paying 10% of gross rent to a property management sucks, OTOH, I don't have to manage it, it is tax deductible, and the property still cash flow better than anywhere in Ontario. To me, it was a case of why not as I feel it is just a matter of when Alberta RE would go into another supercycle like it did in 2005-2006 where we saw 20-30% appreciation.
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WinterSleep wrote: Thanks for the comments.
  • I am less concerned about the current trend. Even GTA condos were stagnant up until a few years ago. And the idea is to buy pre-construction with the hope that things pick up in the future.
  • With prices going up across the country, would Calgary be a good candidate for people to move to? Just like people are moving to Texas from California for tech companies, could the same trend happen for Calgary?
  • How bad is the weather compared to GTA?
  • Obviously we are looking for deals so if prices are down right now that is not necessarily a bad thing. What am I missing? Won't some people and companies eventually move from GTA's insane prices to lower priced metropolitan cities? Forget Montreal as it's French and Quebec is not business-friendly. Leaves out Vancouver and Calgary. And Vancouver is already expensive. What am I missing?
The old saying buy when others are fearful, sell when others are greedy comes to mind.

I have also been taking a look at condos and semis out there. And liked the attractive cost vs rental income. But to be honest on these forums it’s mostly downtown Toronto and anything outside of that is un-investable. You will see that in the detached GTA forum. Basically turned into 100% “well they are all going to be sorry when Toronto opens back up and want to be back downtown”. And as such the reasons for the rapid rise in prices outside of the GTA escapes them. The same will apply to Alberta, or any other part of the country for that matter.

The reality is again, perhaps that attitude is what presents the opportunity. Same as scoping up stocks just over a year ago. There’s always reasons why not to buy something. The biggest returns typically when that happens en masse. Like $200k condos in Bowmanville in 2015 now going for $450-500k.

If you see any projects that look interesting I’d be interested to see what ones you are looking at.
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May 10, 2020
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cartfan123 wrote: The old saying buy when others are fearful, sell when others are greedy comes to mind.

I have also been taking a look at condos and semis out there. And liked the attractive cost vs rental income. But to be honest on these forums it’s mostly downtown Toronto and anything outside of that is un-investable. You will see that in the detached GTA forum. Basically turned into 100% “well they are all going to be sorry when Toronto opens back up and want to be back downtown”. And as such the reasons for the rapid rise in prices outside of the GTA escapes them. The same will apply to Alberta, or any other part of the country for that matter.

The reality is again, perhaps that attitude is what presents the opportunity. Same as scoping up stocks just over a year ago. There’s always reasons why not to buy something. The biggest returns typically when that happens en masse. Like $200k condos in Bowmanville in 2015 now going for $450-500k.

If you see any projects that look interesting I’d be interested to see what ones you are looking at.
I agree with you there is potential, but more so in semis/detached. Toronto real estate really shouldnt be seen as a parallel for any place. Even US RE hasnt followed that route.
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Aug 13, 2019
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cartfan123 wrote: The old saying buy when others are fearful, sell when others are greedy comes to mind.

I have also been taking a look at condos and semis out there. And liked the attractive cost vs rental income. But to be honest on these forums it’s mostly downtown Toronto and anything outside of that is un-investable. You will see that in the detached GTA forum. Basically turned into 100% “well they are all going to be sorry when Toronto opens back up and want to be back downtown”. And as such the reasons for the rapid rise in prices outside of the GTA escapes them. The same will apply to Alberta, or any other part of the country for that matter.

The reality is again, perhaps that attitude is what presents the opportunity. Same as scoping up stocks just over a year ago. There’s always reasons why not to buy something. The biggest returns typically when that happens en masse. Like $200k condos in Bowmanville in 2015 now going for $450-500k.

If you see any projects that look interesting I’d be interested to see what ones you are looking at.
I recently bought in Calgary for some of the reasons you mentioned, so I’ll bump this to chime in. Just like the investors on here who advocated for buying downtown Toronto condos during the dip last year, I would rather buy when things are slow instead of FOMOing into a seller’s market along with everyone else. The monthly cash flow on rentals in Calgary is better than in southern Ontario, there’s no land transfer tax, and the appreciation is anyone’s guess anyway (though I’m optimistic).

In my search I didn’t find any precon condo options that were reasonably priced compared to resale. I can see why the realtors are always pushing them to GTA investors. GTA investors see 1 bed Calgary precons for $250k and probably think it’s a great deal because it’s half the price of projects in places like Bowmanville or Brantford, but they don’t realize that Calgary resale is even cheaper. Always compare to the local market, not to the Ontario market. The precons often offer rental guarantees for the first couple years but those rents are above market and not sustainable (though they are used in their overly optimistic cash flow calculations), so they are really just subsidizing your rental income for a bit at the start.

I’m tepid on resale condos too. There is a lot of supply on the market and more on the way. Lots of purpose-built rentals too, many of which are new or under construction. I could be wrong and maybe this is a chance to buy very low, but I don’t see the condo market picking up anytime soon, there’s just too much supply.

The best options I found for cash flow were detached or semis with secondary suites (basement apartments). I also think freehold offers the best shot at appreciation given the condo supply I mentioned above. I saw plenty of houses that would be cash flow positive on day one, even after accounting for repairs, vacancies, and hiring a PM. You could also look at adding value by buying a house with an illegal secondary suite and bring it up to code and make it legal (the city has an amnesty on this right now and has relaxed the rules and costs), but that may be too hands-on for an out of town investor.
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brmst1 wrote: The best options I found for cash flow were detached or semis with secondary suites (basement apartments). I also think freehold offers the best shot at appreciation given the condo supply I mentioned above. I saw plenty of houses that would be cash flow positive on day one, even after accounting for repairs, vacancies, and hiring a PM. You could also look at adding value by buying a house with an illegal secondary suite and bring it up to code and make it legal (the city has an amnesty on this right now and has relaxed the rules and costs), but that may be too hands-on for an out of town investor.
During the interviewing process, I was chatting with a property manager in Edmonton, and it was explained to me that given the current glut of rental supply in Edmonton, there are little demand for basement apartment/secondary suite. Though, prior to the Pandemic, these secondary units were very popular to be rented out as Airbnb. I haven't talked to anyone in Calgary do you find that to be the case there as well?

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