A myth persists that one should not invest in a condominium home because, "you don't get any land". What nonsense. Show me a condo that's built in the sky! All condominiums are built on land, and that land has value, and often more value than that of a single-family home.
It makes no difference that land occupied by a condominium highrise, walkup, townhouses or bungalows is owned collectively by all home owners in the development. That land plus each home on it of whatever style, along with the amenities, plus the location, are all worth money, and the market puts a high value on such properties in our growing and increasingly urban city.
Very often land with condominium development on it has increased in value by the simple fact of its higher-density development. A double lot with a condominium six-plex on it is obviously more valuable than a double lot limited by its zoning as a single-family home location. As well, higher-density condo development is often in choice locations, be it downtown, in an up-and-coming neighborhood such as Kensington, or near an existing or planned rapid-transit station.
New condominium apartments in Calgary are commonly selling for $300 per square foot for modern structural-frame construction, while concrete tower apartment homes can cost $400 or $600 per square foot. Compare that to the cost of a new single-family home and it's quickly apparent that finished living area cannot be the only factor in setting market values. The land condos are built on and that land's location are often worth far more than single-family home land.
Some people are confused by the fact that the City levies no tax on the common property of condominium developments. It's not that the land, parking, the building's shell and any amenities such as the tennis court and swimming pool have no value, but rather that the value of those assets are reflected in the market price--and thus the taxes levied--on the living units within the development. Again, that explains why condominium homes can have per-square-foot market values exceeding those of houses.
As a matter of fact, Calgary condo owners have a complaint with the City on exactly this point. Taxes are levied on an approximate market-value basis. But because condo townhouse and apartment development is more dense than house subdivisions, and because condos use in-ground utilities (sewer, water, even electrical) and surface utilities (roads, sidewalks) more efficiently, condo owners may be paying more than their fair share in support of the city's infrastructure.
Talk to your Alderman about that one, but we won't be distracted from our point. Condominiums come with land that has value, just as a house stands on land that has value. It makes no difference that you own your single-family lot by yourself, while the next person owns his condominium land jointly with 40 or 100 other people. Each plot of land has value in proportion to its location, its use, and the living and locational value that it provides to its owners.
Calgary Condominium Directory
