July 25, 2016 | Kathleen Renne
The next stepMove-up homes driving construction activity, community development, say local housing officials
The head of Calgary's new home industry believes move-up products have become the go-to sector within Calgary's residential construction industry, and will be the backbone of new communities moving forward.
Allan Klassen, who is the newly minted chair of the Canadian Home Builders' Association - Urban Development Institute Calgary Region, said buyers' focus over the last several years has been increasingly focused on detached product priced over $500,000.
"It is the prominent driver in terms of overall growth of new construction," said Klassen, who is also senior vice-president of Calgary housing for Brookfield Residential, which is behind the mixed-use Seton development in the southeast and the recently announced Livingston community in the city's north.
He noted move-up homes provide the foundation behind many of Calgary's newer communities, such as Auburn Bay, Cranston and expansions in Tuscany.
Klassen describes the typical move-up home buyer as young. He estimates nearly half of these buyers are between 25 and 34, while their average household income is around $125,000.
"When a family is growing, parents are looking for schools, parks, kids playing on the street. They're looking for a sense of belonging."
Their reasons for moving up vary, but are primarily driven by lifestyle changes, such as a growing family. As such, the adage that real estate is about "location, location, location" still holds true when considering move-up buyers.
"When a family is growing, parents are looking for schools, parks, kids playing on the street. They're looking for a sense of belonging," said Klassen, adding that, once those locational needs are met, features such as increased square footage, more bedrooms and storage space come into play.
Stephanie Myers, who is Jayman BUILT's vice-president of single-family housing operations in Calgary, estimates 55 per cent of the company's sales year-to-date fall into the move-up category.
"This is a higher rate than we would see in a typical year," she said, noting the price band for move-up homes has widened. She added move-up homes used to be $500,000 and up; now, however, they're available for around $450,000.
"Given the incredible price points in the current market, and with interest rates running as low as they are, we have seen a number of buyers skipping the traditional starter homes and jumping right into the move-up segment," said Myers. "The first-time buyer is more prominent in this group than ever before."
Klassen agrees, saying Brookfield currently sees more than half of its move-up buyers coming directly out of rentals.
According to both Klassen and Myers, move-up buyers will typically settle into their homes for five to seven years before looking to move up again – often within the $600,000-$800,000 price range.
Don Barrineau, Mattamy Homes' division president in Calgary, said his company is seeing similar demand within the move-up sector. Mattamy has currently released new floor plans within its master-planned communities in Calgary and Airdrie that offer larger square footage (up to 3,400 square feet) and larger lots (up to 43 square feet).
"We want to have a large variety of consumer segments and product types in our communities," said Barrineau, noting that offering move-up homes allows buyers to go through the majority of their life cycle in one community, should they so choose.
Barrineau encourages move-up buyers do their homework and market research to determine, "what changes will happen within a person's life that will instigate a move to a different product type, and what will they be looking for in that different product type."
In Cityscape in northeast Calgary, for example, Barrineau said move-up buyers are seeking more bedrooms and an option to include a spice kitchen.
Tagged: allan Klassen | Brookfield Residential | buyers | Calgary Real Estate | Calgary Real Estate News | CHBA | chba-udi | Feature | Homebuyers | jayman built | Mattamy Homes | move-up homes | YYCRE