Get ready, Calgary, for “big city” floor plans! And I don’t mean “spacious” floor plans. The downtown condominium market is seeing a huge supply and demand for 1 bedroom floor plans under 650 square feet that used to be unheard of in Calgary. New developments like Tarjan Pointe, Chocolate, Union Square and Midtown have a high percentage of their suites under the 650 square foot mark. In most cases, these are the suites that are selling out the fastest!

In comparison to larger units in a new development, the smaller units will be the most attractive to some buyers based solely on price point. Both first time buyers and investors alike will look for the lowest price point. But don’t be surprised by the prices. These cozy 1-bedroom suites are not cheap! Prices can range from $130,000 to over $230,000, depending on the level of finishing. That’s over $330 per square foot! And we are seeing more buyers willing to pay for high end finishing even in these smaller units. Most newly constructed single family homes in Calgary fall well under that figure.

So what is driving this new trend of smaller, more expensive units? There are several factors to take into consideration. The first is land value. There are fewer empty lots to be bought in the inner city core. So that means prices for land close to downtown has moved up. Add increased construction costs and the profit a developer is going to make on a building is decreased. A good way for them to keep their profits up and supply the markets thirst for quality is to design creative, well appointed smaller sized floor plans and charge more per square foot for them.

Another reason is the huge influx of skilled and educated young people in Calgary. Calgary has the highest percentage of people with post secondary education in Canada. With interest rates low, many of these people appreciate the benefits of owning property rather than renting. Even though they may be fresh out of school, they are looking to buy. The lower priced condos match what their budgets can afford. And the location is close to where they are working. Plus, with occupancy up to 18 months away, they have more time to save the down payment needed at closing. This down payment also acts as an investment with future increases in equity in the property. Owning is affordable and you’re making money. Seems like a match made in heaven!

Although some people may speculate that these smaller, more expensive condos won’t fly here in Calgary, they certainly seem to be filling a necessary niche of the inner city market.