The price of a townhome in Calgary is surging and leading the country as the city faces continued population growth and demand on the housing market.
According to a report from real estate firm Zoocasa, the price of a townhome in Calgary is growing faster than anywhere else in Canada, with the average price up 17 per cent over last year to $458,100.
Zoocasa examined the average price of townhomes across 20 Canadian cities and compared the difference in prices between February 2024 and the same month last year.
In comparison, Edmonton’s year-over-year growth in townhome prices reached 10.3 per cent to $245,900.
“I think the Canadian dream for probably most people is they want, at some point in their lives if they choose to have a family, is to have a detached home,” said Tom Albrecht, a realtor with RE/MAX First. “If we’re in an affordability crunch, then it’s townhomes typically the way people will go, 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, up 16.1 per cent over the same time period last year.
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Mark Neustaedter, a realtor with eXp Realty, said the townhome market is becoming more accessible compared to single and semi-detached homes due in part to a lower minimum down payment.
The Zoocasa report noted a five per cent down payment for the average townhome in Calgary is $22,905 compared to a minimum down payment of more than $50,000 on a single-detached home.
“When you’re talking about detached, it’s a totally different world, there’s hundreds of thousands of dollars of spread there,” Neustaedter told Global News. “If you’re looking at a first time home-buyer, five per cent down is maybe a reasonable mortgage payment even with interest rates the way they are right now.”
However, supply continues to decline with CREB noting the majority of the decline is due to lower priced homes coming off the market.
“Our overall supply levels under $400,000, it used to be about 40 per cent of the row homes were under that price range. Now, only 20 per cent or so,” CREB chief economist Ann-Marie Lurie told Global News. “We are really seeing a shift, there’s just a lot less affordable product for that row style property.”
It follows a record year for housing construction in Calgary with more than 15,393 homes built in the city in 2023; 11 per cent more than the previous year.
The construction of multi-residential homes increased by 49 per cent while the development of secondary suites jumped by 43 per cent over 2022.
“A lot of those starts were on the higher density side, so we saw a lot more row construction, we’re seeing more of that affordable product come on the market to meet that demand,” Lurie said. “It’s just a matter of how long it takes for that stuff to get completed.”
Calgary’s mayor said the dwindling supply is one factor motivating the city-wide rezoning proposal, which entered its third straight week of public hearings at city hall.
The proposed change is one of more than 80 recommendations in the City of Calgary’s housing strategy, which would see the default residential zoning district amended to include more housing types like rowhouses and fourplexes.
“People who are entering the market can afford the townhome, and that’s why we have to have more of that product to make sure people can actually get what they need,” Gondek said. “That’s what we’re talking about in terms of increasing supply.”
However, experts said it may be some time before that supply catches up with demand.
“Supply should eventually catch up,”Albrecht said. “But it takes time to build homes especially when builders are struggling for labour.”
© 2024 Global News, a division of Corus Entertainment Inc.