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May 01, 2019

Real Estate Insider - Lake life

Chestermere growth on the horizon

Mario Toneguzzi

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Chestermere describes itself as a dynamic recreational city with all the ambiance of a laid-back lakeside community.

“Here you will find endless opportunities to relax and unwind,” it says on its website.

“Chestermere is a sustainable lakeside recreational community that is safe and family oriented . . . Chestermere is creating an amazing place to call home through innovation and
community collaboration.”

Located just minutes east of Calgary, the City of Chestermere has become an attractive place to call home for people interested in living in a smaller community but within striking
distance of all the amenities of the big metropolis.

“Chestermere has always been an appealing place to live — we are one of the fastest growing communities in Canada and have evolved from a summer village to a city in less
than 25 years. Whether you are watching the sunset from a kayak, enjoying a picnic on the beach or teaching your kids to waterski before supper, Chestermere is a community
where you can relax and reconnect with family and friends,” said Mayor Marshall Chalmers.

“Coming into our community feels like you’ve found a haven the way time seems to slow down here. Quiet streets and friendly neighbourhoods create a peaceful setting but when
you’re ready to be active, a five-kilometre lake surrounded by pathways and family friendly events are right outside your door.”

In fact, there are several new community development projects that are scheduled to launch this year or have already broken ground.

Chelsea by Anthem United will be launching soon. It is a 320-acre master planned community that on completion will have over 7,000 residents in a variety of housing types near
schools, parks, neighbourhood shopping, pathways and an eco-park.

Qualico Communities has Dawson’s Landing which launched last year and has infrastructure and servicing now under way on the 267-acre community site. Qualico’s long-term
plans are for the construction of approximately 1,700 homes over 14 phases.

WestCreek Developments, meanwhile, is developing Bridgeport — one of their two planned communities here.

But Chestermere has not been immune to the economic challenges that have consumed the Calgary region in recent years which have put a squeeze on housing demand. Although
the economy has rebounded into positive territory, it’s been a slow and cautious climb out of the depths of the recession.

According to the Calgary Real Estate Board, there were 29 MLS sales in Chestermere year-to-date until the end of February compared with 46 for the same period in 2018.

The average MLS sale price of $479,924 was down from $515,437 last year while the median price dipped to $470,000 from $493,750.

CREB uses what it calls a benchmark price to look at the typical home in a market. And that benchmark price so far in 2019 until the end of February was $474,050 in
Chestermere — down just slightly from $478,650 in 2018.

James Cuddy, senior market analyst with Canada Mortgage and Housing Corporation, said year-to-date until the end of February there have only been nine single-detached home
starts in Chestermere compared with 17 for the same period in 2018.

For the entire year in 2018, there were 74 starts in the single-detached market which was down from 105 in 2017 — a 30 per cent decline.

“By looking at the data, we see that it’s largely singles (single-detached). The average price is comparable to Calgary. Slightly more expensive. I think the only area that’s more expensive in the region is the rural Rocky View County,” said Cuddy. “It’s an area where singles are being built and individuals are looking for properties with a larger lot size.

“And perhaps areas that are not in the urban centres. Individuals who desire that type of living with the larger property a single detached unit in a more rural area is something they are interested in in Chestermere.”

Cuddy said Chestermere is similar to the overall Calgary market. In the period prior to the recession, there was a lot of activity with new units coming onto the market. But when the recession hit in 2015, all of the activity slowed down and now the number units under construction is really low at 50 single-detached units at the end of February.

“Historically speaking that’s pretty low,” said Cuddy, adding that in the resale market the number of months of supply - the amount of time it would take for the current number of homes for sale to sell given the current demand - is rising and relatively elevated.

“This is putting downward pressure on the prices which is what we’re seeing . . . They’re facing the same challenges as Calgary. Sales are down. Year-to-date, the resale market
we’re at 2015 levels and that was right in the middle of the recession. Inventory is high. So there’s a lot of existing listings. I imagine in the new housing market, even though we
don’t publish it, inventory is also high and this is putting downward pressure on prices.”

In early February, Chestermere City Council passed an Economic Development Incentive Policy intended to promote and incentivize economic development within the City of Chestermere.

The City said the provisions allow for the municipal portion of supplementary taxes for new construction of commercial, industrial and specified residential buildings be cancelled, reduced or refunded.

“We just announced a tax incentive to bring needed non-residential development to our community – specifically commercial and industrial projects, senior’s housing, and three to four-storey apartments. This program waives municipal taxes for up to two years on certain projects and we anticipate it will help spur needed projects in our community,” said Chalmers.

The City said eligible developments can apply for the Economic Incentive Program when they submit their building permit application. Construction must be completed and an occupancy permit must be issued within 24 months. If the property has met all the conditions, the owner will be advised that the municipal portion of the property taxes have been refunded for the relevant period.

The City said eligible projects include any development in a commercial district, commercial development in a mixed-use district, development in an industrial or business park district, housing specific for seniors and three to four-storey apartment buildings.

The City of Chestermere gives the following example of how it would work:

“A property owner has land that is assessed at $1 Million. The owner constructs a commercial building that is worth $10 Million, for a total assessed value of $11 Million. If they qualify for the Economic Incentive Program, the municipal taxes on the $10 Million building will be waived for three years. This could result in a total refund of approximately $235,000.”

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