Adapt or get left behind

If it seems like Calvin Buss has been around Calgary’s condominium scene forever, it’s because he has.

Buss, president of Buss Marketing, has been lending his unique brand of marketing advice to local condo developers for more than a quarter century – assisting with everything from selecting a location to advising on floorplans and amenities to marketing and sales.

“I started in real estate in Calgary in 1980,” says Buss, “just about the time condos came into the real estate marketplace in Alberta." For the first 20 years of its existence, there was no other company in Calgary that specialized in condominium project marketing and sales. "Our first development was Prince’s Island Estates in Eau Claire."

Buss’ second development was Chateau La Caille, also in Eau Claire, where, he says, he learned an important lesson that still holds true today. The more closely a development offers the buyer not only what they were looking for today, but also anticipating what they would want in the near future, the easier it sold.

The company has worked with developers on so many projects over the years that Buss has literally lost count. “A lot,” he says. “We were involved in 60 per cent of the sales in the Eau Claire area. Prince’s Island Estates, The Princeton, Chateau La Caille, 205 Riverfront, La Caille Park Place, East Village, River Grande Estates in Erlton and many, many more.”

The crowning achievement, he says, was in 2010 when, with 2,500 built and unsold condos in Calgary, they helped design, market and sell 400 condos in five days at University City – “the fastest selling condo development in North America in 2010.”

The company currently represents several local developers and projects, including: Castera Properties and Groupe Denux, Mantra in Marda Loop, Mission 19, Matrix in Mission, BRC Developments, Avli in Inglewood, Alture and Skylar in Chestermere.

Right now, says Buss, the local market for new condos is quite slow – more due to consumer apathy than an oversaturated market. He feels this is part of what he calls the ‘hive effect’ in that buyers are more interconnected than ever on social media and there’s no real support among that peer group to purchase. Instead, he says, rental tenancies have gone from an average of 18 to 36 months over the last two years.

“As a consequence, many condo buildings that aren’t selling are being converted to rental buildings. Almost all of the new residential buildings under construction are purpose-built rental buildings.”

That being said, it’s true, says Buss, that inventory levels are high, sales slow and prices falling, making it a buyers’ market. However, with the outlook for the Alberta economy being “less than dismal”, it’s unlikely the buyers' market scenario will actually be fulfilled in terms of increased condo sales.

“Prices have dropped a couple of percentage points,” he says, “homes over $1 million are slow and even the lower priced homes in the $350,000-$500,000 range have the better activity but really no change from last year – condos are the slowest.”

As for factors that might make a positive impact, Buss rules out both the provincial and federal governments, as well as CMHC’s New Home Buyer Incentive Program.

“The Liberals don’t want to sleep with the Conservatives so that leaves two other bedfellows, both of which are dead set against any pipelines. Our Premier got elected on his platform to drive the economy and now he is focusing on pension plans and provincial policing; neither of which are economy drivers.

“Calgary has some 1.4 million people and is learning to adapt to its internal market and not to rely so much on net immigration figures of 15,000-30,000 per year as it once did. The success of any company is its ability to adapt.”

Close, but not quite

In the end, 2019 will probably be looked back on as a year that wasn’t as good as many had hoped for in the new-home building industry, but that it also wasn’t as bad as many thought it might be.

Taking a closer look, the biggest shortfall has been in the single-family (down 385 homes, an average of 35 fewer per month this year) and apartment-style (down 353 units) categories. Townhome development (row homes) was actually up, while semi-detached home starts were down just slightly.

Of course, we won’t know for sure until CMHC’s final year-end numbers come in sometime in mid-January. For now, however, based on the first 11 months of last year, it’s looking like 2019 is going to fall just short of 2018’s final tally by a little more than six per cent.