Calgary’s luxury home resale market experienced a stunning record year in 2013 and a report released Tuesday suggests 2014 could see more of the same.
“With solid confidence in place, Calgary is expected to mirror 2013’s stellar performance, with the luxury market proving strong and steady,” said the RE/MAX Upper End Report. “Another record year is possible, particularly with the optimism that’s now building.”
Calgary’s resale market had 732 MLS transactions of $1 million plus in 2013.
The report, highlighting trends and developments in 16 major Canadian centres, revealed that 75 per cent of markets experienced year-over-year percentage increases in sales — including eight markets that posted double-digit gains. Greater Vancouver led the charge with a 36 per cent increase in luxury sales last year, followed by Calgary at 34 per cent, Edmonton at 32 per cent, Hamilton-Burlington at 31 per cent, Kitchener-Waterloo at 27 per cent, Winnipeg at 26 per cent, Greater Toronto at 18 per cent, and Saskatoon at 15 per cent.
Over two-thirds of markets set new records for high-end sales in 2013. Markets included St. John’s, Quebec City, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Winnipeg, Regina, Saskatoon, Edmonton, and Calgary.
Tamara Pilipchuk, a realtor with RE/MAX Realty Professionals in Calgary, said Calgary’s luxury market is in hot demand and in short supply.
“Not only has the market recovered, but Calgarians see opportunity in the luxury market. With low interest rates and continued growth economically, the luxury market is both affordable and desirable,” she said. “Added pressure comes from increased foreign investment and inter-provincial migration as Calgary becomes more noticed on a global scale.
“There is tight inventory not only in the resale luxury market, but new construction builders are able to pre-sell lots for development upon release. New sale records are being set throughout all communities and all types of product. In a very short time, our housing market has not only recovered but is pushing forward to unprecedented levels. The luxury market is booming but with low inventory and rising prices, attaining that dream home can be a considerable feat.”
She said there were seven homes in Calgary which sold for more than $4 million last year compared with two in 2012.
Since 2009, luxury home sales in Calgary have increased by 115 per cent. Sales for each of the years were: 340 in 2009; 367 in 2010; 447 in 2011; 548 in 2012; and 732 in 2013.
Last year, Calgary had the highest ever sale for the city at $11.1 million for a home in the Crescent Heights neighbourhood.
Calgary had 10 consecutive months of new monthly records in 2013 with the exceptions of January and December. According to the Calgary Real Estate Board, so far this month until Sunday, there were 32 MLS sales over $1 million. The January monthly record was set in 2007 at 36.
Ann-Marie Lurie, CREB’s chief economist, said there has been some opportunity for people looking to upgrade in the housing market.
“As home values have been increasing for those people who are looking for the larger property, moving into something a little different, or upgrading essentially, they have some equity gains potentially in the other segments,” she said. “What’s interesting is that the price gains have been higher at the lower end of the market versus on the higher end of the market.
“Overall people who are doing that likely feel secure with their employment situation as well so they’re willing to make those types of moves. As we continue to see price increases, some of those homes that were at that margin are now pushing above the million-dollar price range. A lot of those newer builds that tend to come onto the resale market tend to be in that higher price point as well especially for single-family.”
The RE/MAX report said the condo sector in Calgary saw year-over-year luxury sales grow by 88 per cent from 36 units in 2012 to 68 in 2013.
“Along with traditionally popular, older, established inner core areas, newer areas such as Aspen are drawing purchasers,” it said. “Infill continues unabated, driving up values in neighbourhoods on the peripheral of the city’s blue chip areas, in pockets like Inglewood and Montgomery. The southwest is also on the rise. Strong confidence, based on sound economic fundamentals, is behind the growth in upper-end sales, along with steady trade-up activity, bolstered by equity gains, incomes, in-migration and immigration.”