Work stops on another Calgary condo project

Work has stopped on another Calgary condo development and some in the industry say abandoned construction sites will become a more common sight.

There is no sign construction will resume soon on Manchester Station, a condo project at Second Street and 53rd Avenue S.E., which has sat idle for the past month.

Todd Gow, a spokesman for Condo Source Corporation, says the project is only on hold. Rising construction costs, falling prices and slower sales mean only 28 of the 99 units have been sold.

"Nothing really happened at Manchester Station, we're still continuing on with pre-sales. We made the conscious decision to halt construction," he said.

3rdcondo project on hold

It's the third major project to be put on hold in recent months.

The plug was pulled on Midtown Gateway, at 10th Avenue and Fourth Street S.W., because of soaring construction costs.

Skytower, at 10th Avenue and First Street S.W. has yet to come out of the ground and there's speculation the projectwill morph into an office building or parkade.

Market analyst Lai Sing Louie says developers were caught with too many projects and not enough buyers.

"The market right now is very competitive as terms of demand. If you look around there's lots of supply out there, not as many buying as in the past."

In the past, projects would go ahead with just half of the units pre-sold. That number now is closer to 75 per cent, meaning getting projects off the ground has become much more difficult.

Condo prices are also falling.The average price of a Calgarycondominium was $287,832 in August,a 10.3 per centdecrease from 2007.

Some developers have told CBCNewsanother half-dozen large condo projects are at risk.

Gow agrees. "In the short term, I think there might be some more fallout," he said.

Be selective, real estate agent says

Canada Mortgage and Housing Corporation says it could be 2010 before all of the excess condo supply is sold off in Calgary.

"It certainly makes people very nervous," said Marlene Swinton, who has been selling real estate in Calgary for 21 years.

Her best advice for condo buyers is to do the research and take your time. "You just have to be very selective where you buy and what you buy," she said.

Real estate agentRob Vanovermeire said that despite construction stoppages, Calgary's real estate market isn't headed south.

"[It's]a year of correction, but fundamentals are strong. And I thinkthe only way that we're going to see any type of a huge drop in pricing is if a lot of people started losing their jobs."