403.617.2879  |  kim.avery@creb.com
 
Back to Blog

High prices in Calgary housing market driving the trend

 

CALGARY — With prices in Calgary’s real estate market continuing to rise, a growing trend is emerging in the popularity of attainable housing initiatives in the city.

 

Attainable Homes Calgary and McPherson Place — two separate projects — have seen an explosion of interest by Calgarians who want to get into home ownership.

 

“What we’re trying to do is provide home ownership to moderately income Calgarians and we do that by way of a forgivable down payment essentially . . . The majority of our customers are renters who never thought they’d ever be able to own a home in Calgary because of the gap that’s growing between the cost of housing and wage increases over the last number of years,” said David Watson, president and chief executive of Attainable Homes Calgary Corporation.

 

According to the Calgary Real Estate Board, in January the average MLS sale price for residential property in the city was $439,671, up 12.34 per cent from January 2012.

 

“The increase in home prices and home costs outpace income considerably. In certain cities, especially Calgary, where we’re having economic good times, the increase in housing values far outpaces the increase in salary for the average individual. As that happens, rental prices also increase,” said Dan Van Leeuwen, president and chief executive of New Urban Consulting which developed and built the McPherson Place condo project in Bridgeland.

 

Attainable Homes Calgary and McPherson Place work in fairly similar ways.

 

Attainable Homes Calgary is a wholly-owned subsidiary of the city with an independent board.

 

“In the last two years, we’ve put 200 families into homes and these are people who thought they’d never own a home. Our goal is to probably get that up to about 200 a year,” said Watson.

 

To purchase a home with Attainable Homes Calgary, households are required to meet the following criteria: annual household income no greater than $80,000; total assets valued no greater than $100,000; qualify for a mortgage; provide minimum $2,000 down payment.

 

“The way it’s sustainable is that people share the equity and after a three-year period if they choose to sell it, they have every right to sell it at any time, they take 75 per cent of whatever the equity uplift is and we get 25 per cent back. That helps keep this sustainable going into the future,” said Watson.

 

The home owner’s share of the property’s appreciation is zero per cent if they live in the home for under one year; 25 per cent if they live in the home between one to two years; and 50 per cent if they live there for two to three years.

 

About 6,000 people have expressed interest by registering on the organization’s website. Current prices for homes range from $156,000 to $270,000.

 

Heather Loeppky recently purchased a townhome in SkyView Ranch that is being built and ready for occupancy in August.

 

“For me it’s a pretty big success,” said Loeppky. “I’m a single parent of a little two-and-a-half year old girl. I’m solely responsible for her. So trying to afford Calgary’s rental market as well as the incredible cost of care, being able to really save for that down payment is such a faraway goal, almost unreachable. So what little savings I do obtain it would just take forever to do it on my own.”

 

The 160-unit McPherson Place is sold out with a waiting list of at least 60 people. Occupancy is now in place with the building to be totally occupied by March 15.

 

“We could probably fill that building a few times over with the demand we’ve had,” said Van Leeuwen.

The average market price for a one-bedroom unit there is $263,000. The purchaser gets qualified on a mortgage based on about 65 per cent of the price. It’s a shared equity program. The purchaser does not pay a down payment but shares in the ownership of the unit with the developer New Urban, INHOUSE Attainable Housing Society and the City of Calgary. When the unit is sold, the purchaser retains the 65 per cent equity share. McPherson Place has qualified purchasers earning between $30,000 and $67,000.

 

INHOUSE is a not-for-profit organization that will operate the building.

 

There is a 10-year restricted covenant period. After 10 years, the unit can be sold to the open market. If a purchaser wants to sell prior to that, they would receive 65 per cent of the market value and the developer and the city would then take their shared equity and provide that to the next purchaser as their down payment. After 10 years, anyone can buy the property.

 

“We’re prepared to take the 10-year risk because we believe in inflation,” said Van Leeuwen.

Read more: http://www.calgaryherald.com/business/Attainable+homes+initiatives+gaining+popularity/7981419/story.html#ixzz2NcnVl0tf

Comments

No comments

Post Your Comment:

*indicates required fields.
Your Name:*
Please note, your email will not be shown publicly
Your Email (will not be published):*
Comment:*
Please type the text as it appears above:
Data supplied by CREB®’s MLS ® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.