2018 Sales by the Numbers:
Breakdown by Property Type:
A total of 80 Hotel Condos changed hands on MLS in 2018 accounting for 18.4% of the total resale real estate market which, is an amazing feat given that traditional financing does not apply on these types of properties. With that in mind, buyers have few options other than using entirely their own funds or a combination of cash plus a line-of-credit. Very few of these condos are kept as primary residences and are instead used as income properties in what is a clear indication that despite poor economic conditions in the province, confidence remains high in Canmore.
The lack of new inventory was a common theme throughout the entire year and multiple offer scenarios were to be expected when a hot condo hit the market. A 2-bedroom unit at the ever-popular Mystic Springs complex came on the market in October and had 4 offers within only a matter of hours. This article CBC published in June predicted that recreational property values in Canmore would increase 8.9% in 2018 although the number was closer to 15% on units at Blackstone Mountain Lodge. In 2017 the average sale price of a 2-bedroom condo at the resort was around $404,000 whereas in 2018 the average was more like $471,000.
Residential, condominium-style properties made up the largest segment of the real estate market in 2018 with 128 condos changing owners - totalling 29.4% of all sales. When the federal government introduced new mortgage rules last January it quickly became clear that property owners in Canmore would not be immune to the effects. The increased scrutiny surrounding mortgage financing resulted in a cooling effect at higher price points and increased demand at lower price points. The new rules also meant that many condo owners who would have upgraded to a townhome this year opted to hold off which, resulted in a shortage of condo supply.
In 2017, townhomes dominated sales in town whereas 2018 did not yield nearly the same result. Only 94 townhomes were sold in 2018 compared to 139 in 2017 which, represents a drastic 32% decrease in this segment of the market. The answer may be a combination of 2 things: the first being the increased attention on the condo market and the second factor being new construction. In 2017 Distinctive Homes was making a big push on townhome development with their Ledges and Venezie projects. In 2018 the large developers seemed to focus their attention more on new condo construction and away from the larger multi-family.
Nothing really notable to mention with the "attached" home products. 2018 numbers were right on track with 2017 at 34 and 33 respectively.
Single Family Homes
Sales of single family homes in Canmore were down 13% in total but the high-end, luxury home market saw a "spike" in activity. For the first time ever, we had the sale of 2 properties in excess of $4,000,000 with the previous record holder being a mere $3,825,000. In total, there were 7 luxury homes to sell in 2018 priced above $2,000,000. Only 6 homes have ever sold for more than $3,000,000 in Canmore's emerging luxury market.
A couple of very unique land opportunities came on the market in 2018 resulting in some serious dollars changing hands. The site of the old church located at 7th Avenue and 7th Street in downtown came up for grabs with a price tag of $4.5M. The MLS listing may have been a mere formality however as the property was then sold for $4.3M later the same day to Distinctive Homes, a local builder with plans for a 140-unit condo development.
The second opportunity was a parcel of 23 acres located close to downtown in South Canmore. The huge chunk of rare land comes with a catch however: an "urban reserve" designation that prevents the owner from constructing more than one dwelling until the future. This long-term "hold" property was listed at $3.5M and sold for $3.35M to an unknown buyer.
Year by Year Comparison:
2019 Canmore Real Estate Forecast:
There are some potentially positive indicators suggesting that Alberta may be entering a period of stronger economic growth. Our prediction for the 2019 year in Canmore real estate will be continued hot sales of hotel condo and residential condominium properties as well as increased sales of higher priced properties. By now, buyers who held off in 2018 because of the new mortgage rules may have saved up the additional down payment they required. Condo owners may now be more likely to sell their properties and move up to a townhome and entry-level buyers may be in a better position to get in to the market.
As Alberta's economic slowdown endures we may also see the emerging trend of Calgarians selling off their vacation properties and second homes. Oil industry executives may be starting to feel the squeeze or perhaps the frustration of their Calgary property values and be looking to liquidate some assets. A correction like this in the market could be helpful in establishing a better equilibrium between buyers and sellers expectations in Canmore.
All in all, positivity, growth and investment will stay at the forefront of real estate in town and a potential boost in new listings could help ease some of the supply issues. Hotel condos will continue to grow in value because the return on investment from rental revenues still makes them a lucrative opportunity. For some real estate investors in the city, the idea of simply breaking even on a monthly basis is a novel idea so with hotel-condo properties currently offering returns as high as 10% per year, there is no question there is still room for growth in the value of these condos. Downward pressure on the price of single family homes will create a bit more equilibrium which, means that this year will be a great time to get a deal in the $750K-$1.3M range.
As always, we are here to help anytime so please do not hesitate to reach out! All the best in 2019!
contact the team at Canmore.net online or call (403) 678-7600