Calgary's condominium sector has taken the hardest hit in a housing market gutted by the plunge in oil prices.
The city’s condo sales are down 17% through 2016’s first quarter compared with a year ago, and average prices have plunged 12% from the 2014 peak to around $290,000.
Meanwhile, nearly a fifth of Calgary’s downtown office towers have gone dark, condo starts have fallen 60% and residential foreclosures have soared 30% from two years ago.
Analysts contend Calgary home sales and prices will fall further unless oil prices rally from their current eight-year lows.
Yet, from his Vancouver office, Mohammed Esfahani confirms he has pre-sold 140 condominiums at his luxury Park Point tower in Calgary in the past year, 10 in the past month, at an average of $610 per square foot.
“We are not afraid,” said Esfahani, a partner in Qualex-Landmark, which broke ground last October on its 34-storey, 289-unit Park Point next to Calgary’s Central Memorial Park as its flagship and only project.
He is confident the tower will sell out before it opens in 2018.
“Our buyers are not investors,” Esfahani said. “They are looking for homes with quality and a great location, and they are in for the long term.”
Park Point is Qualex-Landmark’s sixth condo tower in Calgary’s Beltline and one of the largest residential projects underway in the city.
When finished, it will have a mix of one-, two- and three-bedroom suites, as well as street-level live-work townhomes.
And it will be completed, Esfahani said, even in a city where panicked condo developers have slammed on the brakes.
Calgary condo starts are down 60% from the 2014 peak, with about 4,800 units expected to start this year.
“We have always completed everything we have started,” Esfahani said.
There has been a bright spot in the storm clouds: prices for both construction labour and material are now lower in Calgary, Esfahani said, due to layoffs and shutdowns in the resource sector.
“That has cut our costs a bit.”
Esfahani said he has great faith in Calgary’s recovery, and he believes oil prices will be much higher when Park Point opens.
Qualex-Landmark, he said, will then begin construction on its second Park Point tower at the same location.
“Calgary has a great future.” •