Beltline_B
Senior Member
I agree. Overall I like the tower for the most part, but we already have plenty of the same kind of buildings. It would be nice to see some more variety.
- Thread starter Surrealplaces
- Start date
BKha
Active Member
It must be viable to some degree. We are still seeing plenty of highrise, even lowrise concrete buildings being built.
Calgcouver
Active Member
I should have clarified, it isn't exactly profitable for most developer/builders to do for-sale condos that are high-rise concrete construction, margins are very tight and achievable $psf is generally too low to move forward with, which is why you will really only see wood-frame, low-rise condos move forward (not to mention they are smaller, faster and relatively de-risked in comparison).
All of the high-rise or low-rise concrete buildings you are seeing are purpose-built rental buildings, no for-sale projects have been happening for a while and likely won't until $psf for condos rise and available inventory drops. This article touches on that: https://www.cbc.ca/news/canada/calg...-vancouver-developers-richard-white-1.6005771
In my experience, concrete high-rise construction generally requires above $600-650psf minimum to be profitable (which was the break even point when high-rise construction began to take off in Surrey City Centre). Even Calgary's best positioned newer condos are only achieving $500-550psf and I don't anticipate they will rise to a profitable level which is exactly why the Anthem, Bosa, Qualex-Landmark, Fram-Slokker, Batistella, Great Gulf, Torode and others with land use on high-rise residential buildings that are intended to be condos haven't been moving forward and in some cases have seen the developers list the lots for sale. You might see a handful happen but they are riskier than what most financiers will accept at this time.
People can wish and wish for these to happen, but no one is touching those projects until those thresholds are met as financing doesn't work, so no it isn't really viable. Not to mention high-rise buildings at subprime TOD locations, those are straight up doomed for condos.
MichaelS
Senior Member
First and Park will be an interesting test. Highrise concrete project, that Graywood is claiming sold out in a matter of weeks. We will see if those deposits give enough confidence to actually break ground.
MissingMiddle
Active Member
Concrete condo construction can be profitable in certain contexts, it just depends on a lot of factors. A big one is the affordability of other housing types. In places like Toronto or Vancouver, buying a SFH anywhere near the urban center requires inter-generational wealth. Thus, the condo markets there are doing well. There's literally a secondary condo market where preconstruction units are sold with a markup because entire buildings sell out in days.
Given the targeted marketing of First & Park, I wouldn't be surprised if the units were snatched up by people who aren't local looking to "diversify" their portfolios, with one of two results:
1). Minimal down payment, meaning they'll have a hard time trying to rent those units on the Calgary market for the >$2400 required to break even on mortgage payments and condo fees. Alarming because this exacerbates the condo market problems.
2). Huge down payment, meaning they rent at market rate to cover condo fees and bank the rest. More alarming because apparently people have this kind of money to throw around our housing market (*whispers to self* - "it's not a bubble, they're not overvalued, the market will never crash cause real estate only goes up").
Given the targeted marketing of First & Park, I wouldn't be surprised if the units were snatched up by people who aren't local looking to "diversify" their portfolios, with one of two results:
1). Minimal down payment, meaning they'll have a hard time trying to rent those units on the Calgary market for the >$2400 required to break even on mortgage payments and condo fees. Alarming because this exacerbates the condo market problems.
2). Huge down payment, meaning they rent at market rate to cover condo fees and bank the rest. More alarming because apparently people have this kind of money to throw around our housing market (*whispers to self* - "it's not a bubble, they're not overvalued, the market will never crash cause real estate only goes up").
1875
Senior Member
just a guess but has to be the weight of money for this type of speculative investment in toronto absolutely dwarfs the calgary market. so not completely surprising they bought the “next to a vibrant downtown market” line.
JonnyCanuck
Senior Member
I would say those First & Park investor/buyers from outside Calgary have made a bet on:
1. They will be able to rent the units easily.
2. Over time, the property will increase in value so that they realize a return on investment.
Time may be on their side as there has been virtually no appreciation in value of a downtown condo in 10 years. Sooner or later that has to change.
1. They will be able to rent the units easily.
2. Over time, the property will increase in value so that they realize a return on investment.
Time may be on their side as there has been virtually no appreciation in value of a downtown condo in 10 years. Sooner or later that has to change.
BKha
Active Member
Thanks for the explanation. I was thinking of any highrise concrete construction in general, but for condos that makes sense.
Morshed
Active Member
sorry for pumping this with no updates. I am hearing from leasing agencies that there is demand for high quality office downtown and there are more announcements that international companies want to set up office in Calgary. there's strong demand for high quality condominiums downtown from out of province buyers so this project came to my mind!
“Sure, the overall vacancy rate sits around 28.41 per cent according to Colliers data,” says Mayerchak, “But availability is considerably lower in well-amenitized, higher-class buildings."
“Sure, the overall vacancy rate sits around 28.41 per cent according to Colliers data,” says Mayerchak, “But availability is considerably lower in well-amenitized, higher-class buildings."