Luxury Calgary real estate listings slowly recovering
Fall forecast is for moderate sales and stabilizing prices
I wouldn’t say that million-dollar-plus home buyers are lining up to snap up some premiere Calgary real estate listings, but they’re certainly expressing some sincere interest.
A forecast by one of Canada’s luxury real estate firms has issued some promising statistics though. Over the summer, there were 112 luxury homes featured in Calgary real estate listings for over $1 million that sold to some pretty special buyers. Single-family home sales in this sector and some fairly opulent attached home sales (think Altadore or West Hillhurst) seem to be stabilizing in the city. Unfortunately, the same isn’t quite true for condominiums where we are seeing a huge oversupply. In July and August, just two luxury condos changed hands which is about 33% fewer condo sales than the summer of 2016. So far this year, the most expensive condo to be sold in Calgary was a $6 million beauty in the Mission district in The River. This is an amazing building on 26 Ave SW currently under construction with an average price tag of $1.745 million. There are still buyers out there who want these one-of-a-kind properties.
Luxury Condos Will Move When Oversupply Dimishes
We definitely have a serious over-supply of $1 million-plus condos, a legacy of the boom years when developers – particularly in the inner-city – were racing to building condominiums because of the voracious demand. Because it takes a few years to get permits, pre-sell and then build, it’s hard to predict the future. And now, here we sit with some fairly price units just waiting for the right buyer to come along. As construction eases we hope to see absorption rates increase on these properties.
Calgary Real Estate and Oil Prices
Everyone knows that the downturn is a result of oil prices just falling further than anyone believed possible. Calgary real estate listings in the luxury category are tied to oil prices in a very significant way. Now that the economy in Calgary is starting to think in a new way, buyers and sellers are also starting to re-think a few things based on a new world order. There seems to be a better connection now between perceived value and actual value when it comes to luxury Calgary real estate listings.
After all, we’re really not going to see a year like 2014 for a long time. That year was just incredible. Calgary real estate saw the highest volume of luxury home sales in 10 years – if not ever. Now, buyers are starting to think that they can get more home for the money and sellers are starting to be more reasonable with their asking price. With oil prices more stable, there’s less uncertainty about where Calgary real estate listings in the luxury sector might be headed.
The first of this year has been encouraging in the luxury home market. The Calgary Real Estate Board says that January to June of 2017, sales of luxury home in this city was up by 24%. While this might make you go “ yahoo”, we’re far behind other Canadian cities. Like Montreal – this summer luxury home sales were 60% higher than Summer 2016. Vancouver and Toronto were so-so which is surprising considering the Canadian economy, as a whole, is doing fairly well. Unemployment stats across the country are leveling off and the dollar is doing well. There have been some minor increases to the interest rate but not enough to scare people away from buying.
Back to Calgary though – the new reality in the city means oil might never get back to $100 a barrel, and if prices stay in the $50 to $60 range, then so be it. Let’s reset, get back to business and watch the luxury home sector start doing well again.