Calgary’s row housing sees fastest price growth in Canada

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They’re not too pricey and, yet, not too small either. Townhomes have become the Goldilocks housing type in many markets across Canada, including Calgary.

And a recent study shows that the city is the hottest market for row housing when it comes to year-over-year percentage price growth.

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“It’s the closest thing to a single-family home for many people,” says Mark Neustaedter, realtor with eXp Realty in Calgary. “That’s why townhomes have been so hotly sought after in the city.”

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The report by national realty firm Zoocasa examined year-over-year growth for the average price of a townhome in 20 Canadian cities from February last year to Feb. 29 this year. In Calgary, the average grew 17 per cent to $458,100. The next highest growth was in Edmonton where prices grew about 10 per cent to reach, $245,900 — the second least pricey market next to Regina.

Saskatchewan’s capital saw prices fall two per cent to $225,600, the third largest percentage decline in the study. Winnipeg experienced the largest drop at 10 per cent with an average price for $283,500.

Despite the surge in townhome prices in Calgary, the segment remains “attainable for many buyers,” Neustaedter says.

Townhomes have continued to sell at a clip since February, too. As of late April, the average price was up nearly 19 per cent year over year to nearly $475,000, and sales have grown about 13 per cent, Calgary Real Estate Board statistics show.

By comparison, the average price of a resale single-family detached home in late April was up about eight per cent to nearly $790,000 while sales were flat year over year.

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Rising townhome sales reflect a trend in Calgary that has been building for about five years, says Tim Jones, associate broker/owner of Re/Max Complete Realty in Calgary.

A townhome increasingly “is a good choice for first-time buyers, (buyers) that wish to downsize and also those trying to reduce costs,” says Jones, noting townhomes account for 17 per cent of all resales.

Five years ago, about 60 per cent of all resales were for single-family detached homes. At the time, the benchmark price — the typical home — was about $476,000. Now, about 44 per cent of resales are single-family detached homes, he adds.

Apartments have also seen a resurgence due to affordability. The average price five years ago was about $285,000 whereas today the average price is about $337,000.

Jones further notes townhomes were only slightly more expensive in 2019 with an average price of $300,000, when they made up about 12 per cent of total sales.

Semi-detached homes — although less costly than single-family — are generally not a top second choice for buyers due to their lower supply than other segments, and higher price. In mid-April, for example, the average price was $614,000, up nearly 17 per cent year over year, but made up only eight per cent of all housing inventory.

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A key driver for townhomes is the lower minimum down payment due to the lower price tag, making them more attainable for first-time buyers, Neustaedter says, pointing to the Zoocasa study showing the minimum (five per cent) down payment in February was about $23,000.

In contrast, the down payment for a single-family home was more than $52,000, and about $36,000 for a semi-detached unit.

When interest rates decrease, demand for townhomes and other housing will likely rise rapidly as buyers have increased purchasing power. Albeit it will likely be short-lived as prices will likely move higher, too, Neustaedter notes.

“I expect it to be a really small window of increased affordability.”

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