Calgary Condominiums - Alberta Real Estate - Houses, Condos, Condominiums

This is an article published in the Calgary Herald about the family we had the pleasure to help find their first Calgary condo.

Calgary is increasingly a condo-centric city, with many new buyers showing little hesitation in taking on 40-year or no-down payment mortgages not only for single-family homes, but also townhouses and apartment-style suites.

"It is kind of a scary prospect but I’d rather do this than keep renting," said Tammy Hudak, 34, a single mother of two school-aged children who is managing the cost for her new south-Calgary condo through a 40-year mortgage.

She would have rather bought a house with a garage and a backyard for the kids, but her decision was made for her. "It was about affordability, unfortunately," Hudak said.

A new national Statistics Canada report released Wednesday suggests that across the country, people are still enamoured with owning their living quarters even with rapidly increasing costs.

Canada’s home ownership rate has reached levels not seen in more than 35 years, a quarter of Canadian households spend 30 per cent or more of their pre-tax income on housing costs, and for the first time since the statistical agency started keeping track, more than half of single-mother households owned their own home.

The report also suggests that Albertans are more likely than other Canadians to carry a mortgage, and condominium ownership is increasing faster in Calgary than any other major centre in Canada. The high cost of housing is the major factor.

"Affordability," said Lai Sing Louie of the Canada Mortgage and Housing Corp., noting that 2008 will set a record for condo building in Calgary -- for the first time surpassing the number of single-family homes.

"For the people who want to get into the market, that is the overriding factor."

In 2001, 13.6 per cent of Calgary households that were owner-occupied were condos. As of 2006, that has jumped to 18 per cent -- just behind Toronto’s 18.6 per cent.

Albertans are also some of the least shy Canadians when it comes to taking on housing debt. Compared to the other nine provinces, Alberta has the highest proportion of households holding a mortgage, at 62.1 per cent compared to the national average of 58 per cent. The Statistics Canada said the mortgage rate is on the increase in the province.

The Statistics Canada report did not address the issues of amortization length or the size of down payments. However, other sources suggest mortgages are getting larger than ever before, and Albertans are leading the pack.

Extended amortization mortgages have gone from having no profile in Canada just two years ago, to making up 37 per cent of home purchases in 2007, according to the Canadian Association of Accredited Mortgage Professionals. They allow people to take on larger mortgages than they could with a regular 25-year amortization period, while keeping monthly payments low.

Both the federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concerns about the rapid growth of such mortgages, with the central bank governor Mark Carney telling a House of Commons committee last month they are adding inflationary pressure to an already simmering housing market.

Gary Siegle, a Calgary-based regional manager for national mortgage broker Invis, said there’s no doubt Alberta’s figures for these unconventional mortgages is higher. Many people jumped into the market earlier than they would have because they were concerned about greater price escalation here, and they were allowed in by the new mortgage products.

He said he encourages people to plan to pay their mortgages off much sooner than four decades from now. Otherwise, the interest charges are so great, "you’re essentially paying for your house three times."

Siegle said there are conversations within his industry about the debt burden Canadians are taking on. "Have we pushed the limits? We have not pushed the limits as far as the U.S.," he said, referring to the housing crisis south of the border, where lending rules haves been much looser than in Canada.

Overall, the Statistics Canada study focused on changing patterns in Canadian homeownership and shelter costs, found that more than two-thirds (68.4 per cent) of Canadian own their home, the highest level since 1971. In Alberta, more than 73 per cent of households were occupied by owners.

For both renters and owners, housing costs have increased faster than the Consumer Price Index.

The report said with Baby Boomers entering their sixties, many would have expected that the number of Canadians with mortgages would drop. Instead, the share of mortgage-free households has declined.

"Most of the increase in the proportion of households with a mortgage was due to renters moving into home ownership, but some can only be accounted for by homeowners taking on new mortgages or adding to existing ones, possibly to finance renovations or other large purchases," the report said.

Nationally, condo ownership is dramatically increasing. In 1981, less than four per cent of Canadian-owner households were condos. By the 2006 census, that figure reached almost 11 per cent.

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