While buying a new home is usually to fulfil a person or family’s lifestyle needs, it can also be good business.
Along
with first-time buyers, downsizers and young professional couples,
investors are a prominent demographic purchasing homes at new
multi-family developments in the Calgary area.
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They seek desirable floor plans, locations that offer value, and purchase these apartments and townhomes to rent them out.
“I
think this is the perfect market right now for investors,” says
Kimberly Poffenroth, Urban Analytics’ vice-president, business
development and market analysts – Alberta, citing “price drops,” at some
developments, particularly in units that are ready for possession, as
prime opportunities.
Urban Analytics is a market research and advisory firm.
“Any
projects that are complete and do have standing inventory, and are
move-in ready, that’s where you’re seeing great opportunities for
investors, because (in some cases) they can jump in and buy them,
essentially, at pre-sale prices now.”
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While
Calgary hasn’t seen activity from foreign investors at the same rate as
the markets in Vancouver, Toronto and Montreal, says Poffenroth, she is
seeing a pique in interest.
“I have been speaking to
a number of foreign investor firms that have been interested in the
Calgary market,” she says. “I do see an opportunity there, it just
hasn’t been fully captured.”
Poffenroth says the investor buyer, while present, “isn’t as present as they could be.”
“I think marketing to other cities and overseas could be a beneficial opportunity for a lot of developers,” she adds.
In
the Calgary area, “You are seeing more local investors purchasing,”
Poffenroth says. “They’re seeing how strong the rental market is right
now in Calgary, and seeing that as an opportunity, or purchasing it and
anticipating to live there down the road, but they might rent it out for
a couple of years first.”
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Boris and Janice Marinic are among them.
Three
years ago, the couple — who live in Douglasdale — first waded into real
estate investment. Now they have three condos in the lake community of
Mahogany.
“It was just happenstance,” says Janice, of
their first purchase, a one-bedroom condo at Sandgate by Hopewell
Residential. “I had some time to kill, went in, saw their plans, and
fell in love with the idea. I think there’s potential here.
“We
were going in quite early, and thought now is the time to do it,
because once (builders) have completed the build, usually prices go up,”
she says, adding they’ve found their investment has “appreciated by the
time you even walk in the front door.”
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While
visiting the development and its progress on a weekly basis, the couple
discovered, in the same southeast Calgary community, Calligraphy in
Westman Village, buying two more condos here — one with a single bedroom
and the other with two.
Westman Village is an innovative, amenity-abundant community by Jayman Built within the community of Mahogany.
Both
of Boris and Janice’s one-bedroom condos are presently rented out to
single people, and they expect their condo with two bedroom and two
bathrooms, once ready for possession, will provide an ideal layout for a
range of living arrangements.
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“Even
for older, established people who may have (adult) children who may
want to visit them, there’s extra space,” says Boris, adding the
two-bedroom condo is one they may eventually move into, when they’re
ready to downsize, about five years from now.
With location the No. 1 rule of real estate, buying three condos within the same community was no coincidence.
“It
is right on Deerfoot Trail and Stoney Trail,” Janice says, adding her
tenants have remarked on the convenience of access to these major
arteries.
Both Sandgate and Westman Village residents
also benefit from their close proximity to the South Health Campus
hospital in the nearby community of Seton, sitting less than a
five-minute drive away, the couple adds.
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“There
are so many amenities there with stores and restaurants … there is a
lot of value, even for retirement, to just set up shop there,” Boris
says.
At Westman Village, the tenants will receive
access to the community’s unique 40,000-square-foot Village Centre,
which boasts a range of amenities, such as two swimming pools, a
woodworking facility, wine cellar, indoor garden, fitness facilities,
indoor garden and golf simulator.
Jennifer Currie de
Urrutia, sales manager for Hopewell, says investors are “always
interested in finding the best quality and value for their dollar.”
“(Investors)
love Sandgate’s well-designed one-bedroom plans and also appreciate its
amenities, including a fitness centre, Great Lawn and pet-friendly
homes,” she says.
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“Mostly,
investors are looking at this as a long-term investment and base their
purchasing decisions on the modern finishes that Sandgate offers, the
lock-and-leave convenience, the high-quality finishings and
craftsmanship, as well as the amenities offered at Sandgate,” Currie de
Urrutia adds. “They also know how much people love living in Calgary’s
best lake community.”
When it comes to investors, to no surprise, location counts for a lot, says Poffenroth.
“Seton,
last year, actually had 20 per cent of all of Calgary’s multi-family
home sales, and a ton of investors,” she says, of the mixed-use
development by Brookfield Residential commonly dubbed the downtown of
southeast Calgary. “Investors saw that opportunity in the Seton market,
with the price points that they’re offering — and the fact that they’ll
have an employment centre there, they looked at that and getting in on
that community in the early stages, and saw that as a great
opportunity.”
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A community near the University of Calgary, Foothills Medical Centre and Market Mall, was another draw.
“University
District has also seen a high number of investors,” says Poffenroth.
“They’re looking at it from the opportunity of ‘What if my kid goes to U
of C?’ or ‘What if someone I know is working at the hospital?’”
Having
substantial employment hubs near University District by West Campus
Development Trust, which has multi-family developments by Brookfield
Residential, Avi Urban and Truman Homes, “has been a huge asset for
investor buyers,” says Poffenroth.
“We are seeing
those (investor) sales occur more likely in areas where there are
employment centres either within walking distance or a short commute,”
she adds.
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