There are many things that you should always consider when buying a new townhome in Calgary. As of 2023, Calgary’s real estate market is experiencing a significant resurgence in housing demand. Factors such as increased migration to the city, and a burgeoning tech sector have notably contributed to this heightened demand. In November 2023, Calgary’s average and median home prices were reported at $540,106 and $499,000, respectively, marking an increase of 10% and 12% year-over-year.
The Appeal of Townhomes in Calgary for Various Types of Homebuyers
New townhomes in Calgary are becoming an increasingly popular choice, especially for first-time and price-conscious buyers. This trend is reflected in the 11.6% year-over-year increase in Calgary’s benchmark townhouse price, reaching $431,900 in July 2023, outpacing the provincial average increase. Realtor Jared Chamberlain notes the growing popularity of townhomes, despite a 14% decrease in sales year to date, attributing it more to high ongoing demand rather than a decline in interest.
Overview of the Townhome Market in Calgary
The townhome segment in Calgary’s real estate market has seen significant growth, with keywords like “townhouse for sale Calgary” and “new townhomes Calgary” experiencing a surge in search trends. This indicates a growing interest among potential homeowners in this type of property. Townhouses in Calgary often offer a balance of urban luxury and suburban space, serving as a bridge between sprawling suburban homes and compact city apartments. The variety of options, from downtown condos to suburban townhouses, caters to a diverse range of needs and budgets. For an in-depth breakdown of townhomes in Calgary, check out this article here.
Current Trends and Predictions for Townhome Buyers
The average townhouse price in Calgary as of November 2023 was $404,386, representing a 13% increase from the previous year and a 5.4% decrease from October 2023. Furthermore, benchmark townhouse prices grew by 20% year-over-year, reaching $429,100 in November 2023. Sales of townhouses also increased by 7.7% year-over-year, with a current inventory standing at 1.5 months of row home sales. These trends highlight the strong demand for townhomes in Calgary, fueled by factors such as economic growth, affordability compared to other major cities, and a high standard of living that attracts a steady influx of population.
Top 5 Tips When Buying a New Townhome in Calgary
Here are the top five things that you should consider before buying a townhome in Calgary.
1. Location Considerations in Calgary
Choosing the right location is crucial when buying a townhome in Calgary. Potential buyers should consider factors like proximity to urban amenities, including shopping centers, restaurants, schools, and public transportation. Many townhouse developments in Calgary are strategically located to offer these conveniences, enhancing the overall quality of life for residents. This is also essential for pre construction investors, as rentability is greatly determined by location. Try and pick a townhouse that is nearby the proper attractions depending on your needs.
Community living is another vital aspect. Townhouses in Calgary are often part of well-planned communities with amenities like parks, playgrounds, and common areas, fostering a strong sense of community and belonging. This can lead to increased social engagement and a supportive network within the neighborhood.
Additionally, many townhouse communities provide added security features, such as gated entrances, surveillance cameras, and security personnel, offering a safe and protected living environment.
2. Financial Considerations for Townhome Buyers
Of course, financial considerations are essential before you select a new townhome to purchase. While traditional townhomes tend to have less fees than condos, that may not always be the case! Here are some financial considerations to make.
Understanding Mortgage Options and Pre-Approvals
When buying a townhome in Calgary, securing a mortgage pre-approval is a critical first step. A mortgage pre-approval gives an estimate of how much a bank or mortgage lender is willing to lend, at a certain interest rate and term. This helps in determining your budget and ensures you don’t waste time looking at homes over your budget. Pre-approvals also lock in your mortgage rate for a period (up to 120 days or longer, depending on the lender), providing time to find a home without worrying about fluctuating rates.
Budgeting for Additional Costs
In addition to the purchase price, buyers should budget around 2% of the home’s purchase price for closing costs in Calgary. This includes the cost of mortgage default insurance if the down payment is less than 20%, which would increase the overall cost.
Condo fees are another significant financial aspect to consider when purchasing a townhome. These fees cover common areas, utilities, and the reserve fund, and are essential for the maintenance and operation of townhome communities. The cost of condo fees varies, with some Calgary condos charging around $0.50 per square foot or more. For example, a 1,000-square-foot condo could have monthly condo fees ranging from $400 to $550, depending on the per-square-foot rate.
Understanding these fees is crucial as they contribute to the overall affordability of the property. Condo fees pay for heating, water, insurance for the structure and common property, reserve fund contributions, management fees, and maintenance services like snow removal and cleaning.
Understanding GST When Buying a New Home
When buying a new construction home, you will always have to pay GST on the property.
3. Importance of Working with a Real Estate Professional
Working with a knowledgeable Calgary real estate agent offers numerous advantages. Agents serve as champions and advisors, providing guidance on market trends, average costs, and conducting negotiations on behalf of buyers. They complete all necessary paperwork and ensure transactions are smooth and professional. In most cases, the seller pays the real estate commission, so this professional service is often available to buyers without direct cost.
How a Realtor Can Simplify the Buying Process
Realtors bring extensive training in real estate laws and procedures, ensuring transactions comply with legal requirements. This expertise is critical in reading the market, advising on pricing, and negotiating the best deal possible. Realtors adhere to a strict code of ethics, ensuring professionalism and ethical conduct throughout the buying process. If any concerns arise, there are avenues for recourse through the Canadian Real Estate Association (CREA) and local real estate boards.
Moreover, realtors provide access to the MLS (Multiple Listing Service) system, offering a broader range of properties and immediate updates on new listings. This is especially beneficial in a competitive market like Calgary’s townhomes. They also offer invaluable marketing insights, helping to make properties more marketable and reach a wider audience, which is crucial for sellers.
4. Navigating Legal and Regulatory Aspects
Buying a townhome in Calgary, like in any city, involves adhering to local real estate laws and regulations. This includes understanding zoning laws, property standards, and specific municipal regulations that may affect townhome ownership. It’s crucial for buyers to be aware of these legal aspects to ensure a smooth transaction and avoid any future complications.
Importance of Understanding Condo Boards and Homeowner Associations
Condo boards and homeowner associations play a significant role in the management and governance of townhome communities. They establish and enforce bylaws that can include age and pet restrictions, renovation rules, parking regulations, and penalties for non-compliance. Understanding these bylaws is essential before making a purchase decision, as they can significantly impact your lifestyle and obligations as a townhome owner.
While this section provides an overview, I recommend consulting with a legal professional or a real estate expert for detailed and current information regarding the legal aspects of buying a townhome in Calgary.
5. Long-term Considerations and Resale Value
When considering a townhome in Calgary as a long-term investment, it’s important to look at factors such as location stability, potential for appreciation, and community development plans. In July 2023, Calgary’s benchmark townhouse price saw an 11.6% year-over-year increase to $431,900, indicating strong growth and potential for further appreciation. This robust growth, coupled with Calgary’s ongoing urban development and migration trends, suggests a positive long-term outlook for townhome investments in the city.
Considering Future Market Conditions and Resale Value
The Calgary housing market has been characterized by a seller’s market with a sales-to-new-listings ratio (SNLR) of 82%, reflecting strong demand and limited supply. Factors such as continued migration and relative affordability, despite higher lending rates, have supported strong housing demand, leading to upward pressure on home prices. The market is expected to remain strong, with an anticipated increase in home prices for the remainder of 2023. Over the long term, property values are expected to continue rising, driven by factors such as immigration and economic growth.
Conclusion
Buying a townhome in Calgary is an exciting opportunity, but it requires careful consideration of various factors. From understanding the dynamic real estate market to evaluating financial aspects, and from choosing the right location to considering long-term growth and resale value, there’s a lot to consider. Working with a knowledgeable real estate professional can greatly simplify this process, ensuring that you make a well-informed decision. Whether you’re a first-time buyer or looking to invest, Calgary’s townhome market offers promising opportunities for a diverse range of needs and preferences.
For personalized assistance and to explore the best townhome options in Calgary, feel free to reach out to our team of real estate professionals. We can provide you with tailored advice, current listings, and help you navigate the journey towards finding your perfect townhome in this vibrant city.
