CALGARY — Calgary’s luxury home market has been on fire this year and that flame is expected to continue burning into 2013.
Sales of properties valued at more than $1 million set a record in 2012 and the increase in sales in this market from the previous year is taking place at a higher pace than overall residential MLS sales in the city.
Shayna Nackoney-Skauge, a realtor with RE/MAX Rocky View Real Estate, says buyers these days seem to be more confident about the economy as the activity level for sales and showings in the luxury market continues to rise.
“Pricing is very competitive and buyers are definitely getting deals. They’re getting motivated sellers,” she says. “My experience lately selling higher-end homes is that the listings that are selling are a little extra motivated to sell. Buyers are seeing that and getting deals on some great properties. I think activity levels are higher than previous years because buyers are feeling more confident but still wary not to be over-paying.
“I’m also seeing buyers putting more down on a house which shows confidence in the market. The pricing for brand new luxury homes is definitely quite competitive right now – there are some good deals out there for high-end home buyers. With the exception of older luxury homes that are in fantastic view locations on larger lots, it’s tough for them to compete with some of the brand new builds.”
In 2012, 544 homes sold for more than $1 million each in Calgary.
The all-time record for luxury home sales in any month was set in May when 80 properties sold for more than $1 million each.
The previous high for most luxury home sales in an entire year was 458 during the 2007 housing boom.
Don Campbell, president of the Real Estate Investment Network in Canada, says it will be a record year again in 2013 for the Calgary luxury home market.
“What we’re finding is the incomes are moving quickly and what we call a luxury market in Calgary is almost considered an average market in Vancouver and Toronto. The in-migration is not just about the blue-collar workers,” says Campbell. “There are a lot of executives ... moving into Calgary and they’re selling their properties in Vancouver and selling their properties in the Toronto area and Montreal and they’re coming here and going ‘I can get THAT for this price? I’ll take it’.”
Another pillar holding up the luxury home market in Calgary is consumer confidence, he says.
“When you’ve got consumer confidence coupled with three per cent interest rates and people are confident in their job and in their income, that’s the second pillar that’s going to hold up that luxury market,” explains Campbell.
Bob Jablonski, the Calgary Real Estate Board’s president, says the booming luxury home market is an indication that the people buying these types of homes are seeing strong long-term prospects for the city.
“Confidence in the marketplace. Stability. The fact we’re not like the rest of the country. They’re making adjustments as far as prices. And they’re actually getting a bigger bang for their buck. Larger homes are selling for less money than they were back in 2007,” says Jablonski. “They’re getting more house for their money ... They’re saying ‘hey it’s a good investment. I can justify spending that kind of money’.”
He too doesn’t see any letdown in the luxury home market heading into 2013.
“The city’s growing. There’s a lot of in-migration still coming to the city. All the economic factors are there for continuing good news,” says Jablonski.
Rachelle Starnes, a realtor with Royal LePage Foothills, says the luxury market has been strong due to a softening of prices and there are no economic factors to suggest the market will be any different in 2013 than in 2012.
“We remain optimistic that we are headed for a bullish luxury real estate market in 2013,” says Starnes.
Tanya Eklund, a realtor with RE/MAX Real Estate Central, says Calgarians have seen wage increases and higher bonus structures in the last year due to profit margins increasing for companies. The city’s population has also increased with more people moving here.
“Low interest rates and lower inventory will continue to create demand,” says Eklund. “Low vacancy rates and rental rates, which are speculated to continue to rise, will help the real estate market as buyers will turn to purchasing instead of renting. Housing starts will be slightly down this year due to developers pulling back due to the amount of new inventory on the market which will also help the resale market.”