Why You Should Care About Age Restrictions when Buying a Condo

The Good, Bad, and Ugly of Age Restricted Buildings in Calgary

The argument is for peaceful adult living and although we do see the importance of a quiet building, we see greater value in ending age restrictions in Calgary and Alberta as a whole.
— Michael Montgomery, Renzo Real Estate Broker

The Child-Friendly Housing Coalition of Alberta was formed in 2016 with the intention of putting an end to age restricted buildings. From a real estate transaction point of view, we see the benefits to ending age restriction far outweigh the drawbacks.

Imagine: You’re on the hunt for a condo in Calgary and you find the perfect spot close to work. Your Realtor mentions there is an 18+ age restriction in your building but you don’t worry as you are in your 30s - No worries right? Well, there is more to it... Let’s look at the three key elements to keep in mind in this situation:

  1. If you are purchasing with less than 20% down, you will be required to acquire mortgage insurance. There are 3 companies that your lender can use: CMHC, Genworth, or Canada Guarantee. These insurance providers naturally want to minimize their risk, so guess what? CMHC will not ensure any age restricted buildings. The other 2 will look at applications on a case-by-case basis. (Strike 1)

  2. Given the financing hurdles and smaller pool of buyers who can purchase an age restricted building, selling your suite could be more of a challenge. This can lead to a more lengthy process, collapsed deals, and therefore a potential decrease to your market value. (Strike 2)

  3. Let’s say you do purchase into an age restricted building and you find out that you will be becoming a parent. You now must sell your property or move out. What happens if the market takes a dip like it did in 2015-2016 in Calgary and you owe more on your condo than you can sell it for? Potentially you will have to walk away from your condo. The personal impacts of this can be grave and the impacts of a foreclosure on comparable properties can be detrimental to their market value. (Strike 3)

The latter occurred to a client of ours whom we met a few years ago, who had previously purchased a unit in an age-restricted condo at the height of the market in 2007-2008. When they found out they were expecting a child, the market had dropped and they were not able to sell their condo. They were forced into foreclosure and had to rebuild their credit for 5 years in order to purchase their next home.

The argument is for peaceful adult living and although we do see the importance of a quiet building, we see greater value in ending age restrictions in Calgary and Alberta as a whole.

Questions about buying or selling in an age-restricted building? Give us a shout!