Homes are still being constructed in Calgary suburbs at near record pace. The new chairman of the local chapter of the Canadian Home Builder’s Association, Urban Development Institute recently weighed in on the state of new construction building in our city and says move-up homes will be the market segment that keeps everything moving.
Recently interviewed for a newsletter issued by the Calgary Real Estate Board, Allan Klassen believes growth in the new construction sector has been slowly migrating to single-family homes over half a million, typically a move-up product not generally purchased by first-time Calgary home buyers.
Klassen was just appointed CHBA Calgary region chair and also works in upper level management for Brookfield Residential. His firm is working in Seton in Calgary’s South East and in the new central North East neighbourhood of Livingston.
He says he sees the detached sector driving the growth of new residential housing development for some time to come. Move-up homes over $500,000 are already the bread and butter of new Calgary neighbourhoods in the deep South East, such as Auburn Bay and in the expansion of established neighbourhoods such as Tuscany in the extreme North West.
Who are move-up buyers?
On average, most buyers looking to upgrade from a condo or smaller home into a detached home is still a younger buyer under 35 with an annual family income in the range of $125,000. Typically this buyer has a young family and as parents they’re shopping for family-oriented features in a home, extra space and want a community to raise their children where they all feel like they belong.
Reasons for moving from an existing home are usually driven because extra space is required or a better neighbourhood, but location is still key. More bedrooms and extra storage is just as important as accessibility to parks, schools, shopping and recreational amenities.
It’s important for home owners thinking of selling their smaller starter homes to get as much equity as possible out of their home to make their move-up home as affordable as possible.
Single-family home builder Jayman BUILT reports that 55% of sales so far in 2016 have been in this category, which spokesperson Stephanie Myers reports as being more than normal. She also pegs the move-up price starting at $450,000. She also states that because interest rates are so low, they are seeing more first-time home homes just skip starter models all together.
Often those buyers in larger, move-up homes will actually pay more than $600,000 and stay for t to 7 years before looking around again. Some builders try to offer a variety of homes in one community so buyers can trade up and stay in one community.
The same trend is also being reported by new-home builder Mattamy Homes. Mattamy builds move-up models on larger lots, providing as much as 3,400 square feet of living space and is seeing comparable demand in Calgary and Airdrie.
Buyers in the North East community of Cityscape are specifically looking for extra bedrooms in a move-up home and larger kitchens with space for extra amenities such as a spice kitchen. *
*North East Calgary is culturally diverse with a large South Asian population. A spice kitchen, not often seen in North American homes, is a separate kitchen off the main kitchen area where pungent foods with strong odours are prepared and stored. There is often a stove with a high-powered hood van. The purpose is to keep the odours contained rather than fill the home. Strong spices are a desirable element of Indian dishes but not for days on end.