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FREE may 23 to may 29 2014 issue 04-20 www.crebnow.com facebook.com/crebnow twitter.com/crebnow
real estate news from industry experts
cody stuart, Managing Editor
Rental crunch, rising housing costs highlight value of secondary suites for first-time homebuyers Cody Stuart
managing editor
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ike many buyers, Karen Coyle had a checklist when shopping for her first home. Near the top of that list was the option to add a secondary suite. “I wanted to make sure I bought a house I would be able to afford without the help of the income from the suite,” said Coyle. “But I also wanted to buy a house that could easily be suited, so that I would have a buffer in case mortgage prices rose.” She eventually settled on a home in Bridgeland in 2012, adding a second-
ary suite less than a year later. Looking back, Coyle admits her first foray into Calgary’s hot housing market has been successful thanks in part to the income generated from her basement suite. With finances providing the main obstacle for most buyers, adding income via a secondary suite is becoming an attractive option for many Calgarians said Laura Parsons, mortgage expert for BMO Bank of Montreal. According to CREB® statistics the benchmark price of an average Calgary home increased by 9.5 per cent to $446,300 in April 2014 from one year prior. That would mean a typical homebuyer, with a 20 per cent down payment on a 25-year amortization,
SINGLE FAMILY
K aren Coyle’s first home purchase was made easier thanks to the basement suite she added with help from the City’s secondary suite grant program.
would have a monthly mortgage payment of $1,878 based on a five-year residential rate average of four per cent. “If it’s a legal suite... for sure it does help,” said Parsons. “Having a renter downstairs that pays you $1,100 of an $1,800 mortgage payment will allow you to make improvements to the property – will allow you to have a nest egg and an emergency fund.” Calgary’s current rental crunch is further supporting the potential value of secondary suites to homebuyers. The city vacancy rate sits at one per cent – the lowest rate of any major urban centre in Canada, according to Canada Mortgage and Housing Corporation’s (CMHC) Fall 2013
1736
1699 1230
1336 1197
1209
772
APR12 MAY12 JUN12 JUL12 AUG12 SEP12 OCT12 NOV12 DEC12 JAN13 FEB13 MAR13 APR13 MAY13 JUN13 JUL13 AUG13 SEP13 OCT13 NOV13 DEC13 JAN14 FEB14 MAR14 APR14
745
879
974
1006
1174
1132
1354
1517
1575
1638
1611 1386
1480
1609
1582
1576
1710
1766
MLS® NUMBER OF UNITS SOLD* APR ‘12 – APR ‘14
*All statistics based on monthly data compiled by CREB® via MLS® activity.
three part secondary suites series This week: Financial Impact
may 31: Update from city hall
report on the city’s rental market. While vacancy rates have decreased, the average rent for an apartment in the city has increased, rising by 7.9 per cent from October 2012 to October 2013. Even Calgary Mayor Naheed
june 7: city by city comparison
Nenshi, who has been a big supporter of secondary suites, describes the current rental situation in the city as a crisis.
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Calgary price contents index increases news briefs A3 1.5 per cent test your knowledge A6 in April Household emergency action plan CREB® STAFF
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algary’s resale market continues to pace the nation, with a record 10 per cent increase in repeat home sales year-over-year in April, according to new statistics provided by the TeranetNational Bank. Calgary’s double-digit hike compares with a 4.9 per cent national average. Of the 11 centre surveyed, Vancouver followed at nine per cent and Toronto at 5.8 per cent.
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