[JesseLikesCities]

Study finds urban living falling out of favour

A month ago in this space, I had some questions about how the virus will affect home-buying habits.

calgarysun.com

What's people's take on articles like this?

 

[zagox]

Study finds urban living falling out of favour

A month ago in this space, I had some questions about how the virus will affect home-buying habits.

calgarysun.com

What's people's take on articles like this?

I am bullish on, as they put it, "places where specific lifestyle choices are available". Canmore, Muskoka, Whistler, etc. You can commute once a month to Calgary, Toronto, or Vancouver from those places. In a world where many high-end jobs are doable remotely, with the occasional office visit, it makes sense that there will be more buyers and higher prices in those areas. Totally agree with that sentiment.

I am bearish on suburban places that are fairly ho-hum and are mainly attractive because they offer a manageable daily commute, especially if that commute is often on public transit. If you don't have to go to the office every day, do you really want to live in Tuscany or Shawnessy? People buying in those type of neighborhoods probably can't afford Canmore, but they will find appealing value in Cochrane or Okotoks, or even further from the city, if they can continue to work from home at least some days.

I think these articles over-sell the potential negative impact on the inner city. I can see elevator buildings being less appealing than walk-up fourplexes on the margin, but I think the culture, energy, and excitement of urban areas will continue to attract people, even if they don't need to go to an office 5 days a week.

 

[JustDandy]

The reports of my death have been greatly exaggerated- M.T

I think some RE commentators are making these sweeping statements and COVID has been around for 6ish months and the RE market has really been open for 1-2 months. I think its very early to say that Urban Living is not wanted, I can't help but feel this article has been written to glad hand some ho-hum suburban developers. I've always been bullish on mid size (or mid level sophistication) cities that offer a better affordability component to living and some career prospects, I fit Calgary into this category even though its fairly large the RE market for urban living is starting to mature. I read about the Condo's and I can't help but think of all the really poor laid out floor plans and the focus on total space, not efficient space I saw when I moved to Calgary after the GFC. These condos deserve to be worth less, as newer better floor plans have been developed.

I wouldn't touch a suburban property in the Calgary market at all. There isn't much from an investment perspective to be had there. Rents are too low for a new suburban product to have a good cash flow, there isn't enough supply constraint to have any capital appreciation( face it the Jayman's and the Shane's would pump out more product to satisfy demand before there was a huge capital appreciation).

For full disclosure, I'm a Vancouver based, millienial RE investor active in BC, AB, TX, FL and NM. My latest acquisition was a 1600 sq ft townhome in suburban vancouver. My next acquisition will most likly be a 2 bedroom urban condo in either Calgary or Kelowna. I'm an income based investor, with a long horizon. Your views may differ, your strategy may differ but i always enjoy sharing my views from my investment perspective.

 

[zagox]

The reports of my death have been greatly exaggerated- M.T

I think some RE commentators are making these sweeping statements and COVID has been around for 6ish months and the RE market has really been open for 1-2 months. I think its very early to say that Urban Living is not wanted, I can't help but feel this article has been written to glad hand some ho-hum suburban developers. I've always been bullish on mid size (or mid level sophistication) cities that offer a better affordability component to living and some career prospects, I fit Calgary into this category even though its fairly large the RE market for urban living is starting to mature. I read about the Condo's and I can't help but think of all the really poor laid out floor plans and the focus on total space, not efficient space I saw when I moved to Calgary after the GFC. These condos deserve to be worth less, as newer better floor plans have been developed.

I wouldn't touch a suburban property in the Calgary market at all. There isn't much from an investment perspective to be had there. Rents are too low for a new suburban product to have a good cash flow, there isn't enough supply constraint to have any capital appreciation( face it the Jayman's and the Shane's would pump out more product to satisfy demand before there was a huge capital appreciation).

For full disclosure, I'm a Vancouver based, millienial RE investor active in BC, AB, TX, FL and NM. My latest acquisition was a 1600 sq ft townhome in suburban vancouver. My next acquisition will most likly be a 2 bedroom urban condo in either Calgary or Kelowna. I'm an income based investor, with a long horizon. Your views may differ, your strategy may differ but i always enjoy sharing my views from my investment perspective.

Strongly agree with your bullish sentiment on urban areas in mid-size cities. Calgary, Kelowna, and Kamloops are all well positioned in my opinion.

Even before Covid, Canada was behind the U.S. in terms of people and jobs moving out of high cost big cities into lower cost smaller cities - the trend that drove growth in markets like Boise, Reno, and Kansas City. Now that trend is going to be supercharged by more remote work, which means that jobs can move even if corporate offices don’t.

 

[darwink]

The reports of my death have been greatly exaggerated- M.T

I think some RE commentators are making these sweeping statements and COVID has been around for 6ish months and the RE market has really been open for 1-2 months. I think its very early to say that Urban Living is not wanted, I can't help but feel this article has been written to glad hand some ho-hum suburban developers. I've always been bullish on mid size (or mid level sophistication) cities that offer a better affordability component to living and some career prospects, I fit Calgary into this category even though its fairly large the RE market for urban living is starting to mature. I read about the Condo's and I can't help but think of all the really poor laid out floor plans and the focus on total space, not efficient space I saw when I moved to Calgary after the GFC. These condos deserve to be worth less, as newer better floor plans have been developed.

I wouldn't touch a suburban property in the Calgary market at all. There isn't much from an investment perspective to be had there. Rents are too low for a new suburban product to have a good cash flow, there isn't enough supply constraint to have any capital appreciation( face it the Jayman's and the Shane's would pump out more product to satisfy demand before there was a huge capital appreciation).

For full disclosure, I'm a Vancouver based, millienial RE investor active in BC, AB, TX, FL and NM. My latest acquisition was a 1600 sq ft townhome in suburban vancouver. My next acquisition will most likly be a 2 bedroom urban condo in either Calgary or Kelowna. I'm an income based investor, with a long horizon. Your views may differ, your strategy may differ but i always enjoy sharing my views from my investment perspective.

Want to buy my urban 2 bedroom condo I currently have rented ha!

 

[JustDandy]

Want to buy my urban 2 bedroom condo I currently have rented ha!

Does it fall in the category i have listed above .

 

[Sky of Blue]

I agree there are some really awful floor plans in some of the newer buildings. Shove 2 bed 2 bath in 451 sq ft because it looks like good value on paper...looking at you N3. Units with only one window in the entire 2 bed 2 bath unit...looking at you Colours. Doors blocking showers and no surfaces to prep food on or to eat other than on your lap in the micro living room...looking at you Park Central. Clearly designed by people who have never actually lived in a tiny space.

 

[CBBarnett]

I agree there are some really awful floor plans in some of the newer buildings. Shove 2 bed 2 bath in 451 sq ft because it looks like good value on paper...looking at you N3. Units with only one window in the entire 2 bed 2 bath unit...looking at you Colours. Doors blocking showers and no surfaces to prep food on or to eat other than on your lap in the micro living room...looking at you Park Central. Clearly designed by people who have never actually lived in a tiny space.

That's why I like some of the older, smaller, simpler buildings. The floor space is typically more generous but they also have that "old-timey practicality" built into their floor plan too - no unusable space thanks to a weird hallway or curved wall feature or bizarre pillar. I don't mind a 450 sqft unit if it actually makes sense and has some effort placed into space-saving layouts and storage. What I do mind is a 650 sqft apartment that is forced to act as a 450 sqft one due to a bunch of dumb, un-fixable layout/storage issues.

 

[Thrillhou]

With so much inventory in the condo market it's easy to get distracted by the new and flashy condos. I found that the best newish condo building was Castello. All the 2 bed units are large (>1000sqft) and had floor plans that are extremely functional. Looking at the listings in that building and there are some great deals. A large unit with 2 parking spaces for less than you will pay for in Park Point is pretty attractive.

 

[potatopizzafan]

With so much inventory in the condo market it's easy to get distracted by the new and flashy condos. I found that the best newish condo building was Castello. All the 2 bed units are large (>1000sqft) and had floor plans that are extremely functional. Looking at the listings in that building and there are some great deals. A large unit with 2 parking spaces for less than you will pay for in Park Point is pretty attractive.

they're nice units, those condo fee's though....ouch

 

[Surrealplaces]

With so much inventory in the condo market it's easy to get distracted by the new and flashy condos. I found that the best newish condo building was Castello. All the 2 bed units are large (>1000sqft) and had floor plans that are extremely functional. Looking at the listings in that building and there are some great deals. A large unit with 2 parking spaces for less than you will pay for in Park Point is pretty attractive.

I remember looking at some of the units when the building first opened. Definitely nice units that were well laid out.

 

[Cowtown]

they're nice units, those condo fee's though....ouch

There was some kind of special assessment iirc. Nice building tho.

 

[ByeByeBaby]

Castello is interesting; huge balconies but they really went in on the showers being a glass box in the master bedroom, which is an... interesting choice. I like having a door between the bedroom and bathroom if for no other reason than I often go to bed later than my wife, and she wakes up before me so our relative ablutions would disturb our sleep. Condo fees are $0.65 per sq ft or so, which isn't crazy high; maybe the 65th percentile or so for that era. Brand new condos sometimes have cheaper fees, but that's just a waiting game until something breaks or wears out, I'm sure. It's not like Westmount Place or The Estate or Le Germain some of the Eau Claire buildings, where you have to pay $0.85+ up to over $1.00 per square foot in condo fees.

 

[darwink]

Castello is probably a bit more sensitive to having a extra robust reserve fund given their experience with the balconies and the large special. For the cost of the units, the special assessments iirc (~$35k for the 2 beds) wasn't out of line if they had major lifecycle items and wanted to keep fees down. The real kicker was that it was due to a deficiency in construction or design.

I'm surprised that people haven't had those steam showers at least partially frosted.

 

[Sky of Blue]

Special assessments that add no value to a complex because they are repairing design flaws or shoddy work, is lost money. The asset doesn’t gain any value, and it is also stigmatized. Worse, if instead of a one time SA, they absorb the costs by jacking up the condo fees. Then you can’t sell it unless significantly under market enough for a buyer to accept the high condo fee liability.