Sales in the luxury home market have ballooned in Calgary this year.
According to the Calgary Real Estate Board, sales for upper-end residential properties are way above the pace set a year ago. As of Tuesday, there were 291 single-family MLS sales over $1 million this year compared with 234 for the same period in 2010. Also, 18 condominiums have been sold year-to-date in the upper-end price bracket, compared with 11 in 2010.
Miranda Pearson, with the Boutique Realty Group Ltd. of Century 21 Bamber Realty in Calgary, said consumer confidence has been stabilized recently by the low interest rates, making the cost of upgrading to a larger home practical.
“In general, with the softening of the market across the board taking a depreciation of 10 per cent on a $500,000 home versus a million dollar home, makes the million dollar home that much more attainable,” she said.
“Inventory selection of luxury homes has increased compared to availability five years ago. Rather than renovating their current home which may have been selected out of pressure due to lack of choice and forgoing features they desired, this is an opportunity to find a home that suits those preferences.”
Pearson also said the equity stability for buyers already owning in the luxury home market allows them to consider purchasing a second property or vacation property.
“Homeowners of higher-end properties tend to have a greater percentage of equity in their home and are somewhat insulated by market fluctuations. With low interest rates and substantial equity it is timely to leverage that equity to buy a second home.”
Sales in the upper-end peaked in 2007 with 431 single-family homes priced at over $1 million selling as well as 30 condos.
The top sales this year are $3.995 million for a single-family home in the Elbow Park/Glencoe neighbourhood and $4.1 million for a condo in Eau Claire.
“We have seen more sales in the last several months. We just see more confidence in the market,” said Sano Stante, president of the Calgary Real Estate Board. “More confidence in that upper-end.
“A lot of the product that’s moving is some value buying. And some of the new product that’s on the market in the upper-end they’re sort of testing new territory. We’re expanding our limits. We’re testing new waters with some of the prices with some of the new listings that are on.”
The highest priced listing currently in the Calgary city market is $12 million for a home in Aspen Woods. The highest priced condo is $4.195 million in Eau Claire.
Stante said that in talking with other industry members such as builders and architects they’re very busy at the upper-end.
“That indicates to me that people, upper management … have a sense of confidence. Those are the people making decisions based on what they see coming down the pipe.”
Dan Sumner, economist with ATB Financial in Calgary, said low interest rates play a big factor for higher-priced homes.
“A one percentage point difference for a condo that costs $200,000 doesn’t make near a big a difference as it does for a house that costs $2 million,” he said.
“This could be a sign — although I don’t have any direct data to support this — that maybe some of the high wage jobs in Calgary have fared quite well over this (economic) recovery.”
Sumner said the inner-city Calgary housing market has fared better than in the outskirts this year and houses closer to the downtown core tend to be priced higher.
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