CALGARY — Luxury home sales in Calgary have soared this year compared with a year ago, according to a report released Wednesday by RE/MAX.
The real estate firm noted that 145 homes have sold from more than $1 million year-to-date until the end of April, a 51 per cent hike from the 96 sold for the same period in 2010.
Tamara Pilipchuk, a realtor with RE/MAX House of Real Estate in Calgary, said some key factors contributing to the rise in the luxury market are the resurgence of the oil and gas industry, the recovery of the stock market and the overall economic performance of the city.
“Like other major western cities who are experiencing this same increase, we can attribute it to the demographic of Calgarians,” she said. “We are a city full of entrepreneurs and corporate executives who are fuelling the demand for the luxury home market. The public as a whole are reaping the benefits of very reasonable interest rates and we are seeing a renewed confidence in the overall market. Finally, there is a general lack of supply for the luxury market.”
RE/MAX said improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of housing markets across the country.
“Calgary’s luxury housing market has emerged relatively unscathed from the recent recession, thanks to affluent purchasers, who continue to drive demand for home prices over $1 million across the Metro area,” said the report.
“The top end of the market has bounced back with a vengeance as a result, particularly in recent months, with sales rivalling peak levels reported in 2007. Benchmark sales so far this year include the most expensive condominium ever sold in the Calgary area at $4.1 million and two sales over the $3 million price point.”
The report said million-dollar properties are becoming increasingly popular with high-end pockets no longer limited to the inner city. Luxury areas are now spread throughout Calgary including suburban and outlying neighbourhoods such as Lake Bonavista, Aspen, Cranston, Discovery Ridge, Springbank Hill, Patterson, Rocky Ridge and Signal Hill.
“Traditional strongholds like Mount Royal and Elbow Park are experiencing revitalization as older properties are renovated and/or rebuilt,” said RE/MAX. “Local business people, entrepreneurs and professionals are behind the push for upscale properties and the trend is expected to continue as economic performance improves in both the province and the city.”
So far this year, the highest priced single-family home sold in the city was for $3.995 million in Elbow Park/Glencoe while the highest sale for a condo was $4.1 million in Eau Claire.
“We’re seeing activity in the upper end. So it indicates confidence in the economy and perhaps in the oilpatch and we hope that’s going to translate down market,” said Sano Stante, president of the Calgary Real Estate Board.
“All the indications are there’s going to be continued strength in the high end of the market.”
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said “there are good opportunities for prospective buyers looking for a luxury home and some of these buyers were not as impacted by the economic slowdown.”
“Improving economic conditions, gains in equity and the positive outlook in the housing market has helped support demand,” he said.
RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared with the same period in 2010.
Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent) — “where foreign investment has also played a major role” — Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent), said the company.
Six of the seven major cities—with the exception of Calgary—are poised to set records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas, it added.
“Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country,” said Michael Polzler, executive vice-president, RE/MAX Ontario-Atlantic Canada. “The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.”
Elton Ash, regional executive vice-president of RE/MAX of Western Canada, said the strength of the upper-end segment continues to defy expectations.
“That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage,” he said. “Western Canada, in particular, will continue to see the upside benefit of investment from abroad.”
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