Demand from affluent downsizers is rising in Calgary

Despite a real estate market that has endured months of stagnancy, and major price adjustments and oversupply in the luxury homes sector, some luxury condos have been selling slowly but steadily.

With unit prices ranging from $800,000 to $13m, the Concord, Calgary’s latest luxury high-rise condominium, is arguably the most grandiose development the city has yet seen. State-of-the-art amenities include German-engineered kitchens designed by Porsche, personal six-car garages, and an opulent poolside lounge.

“This is our first development in Calgary and sales started in 2014 when oil was still running over $100 a barrel. We sold more than 40 units very quickly, but within months Calgary’s economy had really tanked and, honestly, we were nervous,” said Grant Murray, senior vice president of sales for Concord Pacific Developments Inc. “But it’s been okay. We’ve been on a run averaging a sale a month for the last 26 months. We’re seeing activity in 2017 increase and I think we’ll be able to sell out phase one by the time it’s complete.”  

Murray said the majority of the Concord’s buyers are older, local, and downsizing from suburban detached homes. Kerry Merriman, 60, and Ella Beesley, 54, who co-purchased a 1,500-square-feet condo in the development, fit this description.

Currently, the couple are living in separate detached homes. Merriman plans to sell his home, while Beesley will keep hers in the short-term, as she plans to rent it out to her adult children. Their condo in the Concord will be their first home together in what Beesley calls “an exciting new chapter in both our lives.”

“We’ve thought very carefully about what we want out of this next stage we’re heading into. We consider it a really meaningful time in our lives and we feel we deserve it,” Beesley said. “Kerry’s looking at retirement but I’ll be working for another 10 years. We want to be living somewhere we can continue to live for a long time. We want to be able to walk for groceries and go to the things that are happening downtown. We want a low-maintenance lifestyle that lets us enjoy ourselves.”

“Most people I know in my age group, I’d say more than half, are moving into condos and townhouses these days,” Merriman said.

The demand from an increasing number of wealthy Calgarians looking to overhaul their living arrangements and lifestyle as they approach retirement is, in part, responsible for the success of the Concord development. The rest is down to lack of competition in this sector. 

Ann-Marie Lurie, chief economist of the Calgary Real Estate Board (CREB), said it’s a simple case of supply versus demand.

“Condos make up just 20 per cent of total resale in Calgary and homes over $800,000 account for just 10 per cent of the resale market. So condos over $800,000 is a really small segment of the market,” she said. “This kind of product is new to Calgary; large luxury condos which are probably more comparable to our luxury detached market than our traditional condo market. Because there are so few of them, they need a relatively small amount of demand to be successful.”

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