Interest rate cut could give slumping Calgary housing market a boost

Lower interest rates could provide a boost for Calgary’s slumping resale housing market.

The BMO Home Buying Report, released on Friday, said 62 per cent of Calgarians are planning to purchase a home within the next five years and 16 per cent said the recent decrease in interest rates will allow them to afford a home sooner than anticipated.

The report also said 52 per cent of Albertans are planning to purchase a property within the next five years.

Laura Parsons, mortgage expert with BMO Bank of Montreal, said lower interest rates could boost housing activity.

“Overall the interest rates how much they’ve gone down it’s going to lower their (mortgage) payments,” she said. “The survey clearly says there’s people that are out there that are looking to buy and it’s going to nudge some of them. These rates aren’t going to stay this low for that long . . . I can’t see it not being somewhat of an inspiration for those people outside looking to get into homeownership.

“These months are traditionally slow anyway but I think this is going to be a really good nudge for some of those people and remember too for some of the people who have outside debt that have a home and have some equity this also too will mean maybe they can reduce some of their interest costs by re-writing and collaborating into a mortgage product.”

Just this week BMO dropped its five-year variable mortgage from three per cent to 2.85 per cent.

“Homeownership is still better than renting and with these rates and the (mortgage) payments that probably will actually end up being lower than a standard rental,” added Parsons.

Calgary’s resale housing market has taken a beating in January. So far this month up to Thursday, there have been only 793 MLS sales in the city, down 37.3 per cent from the same period last year. New listings have risen by 43.6 per cent to 3,082 while active listings are up by a staggering 89 per cent to 4,710. The average MLS sale price has dropped by 0.08 per cent to $461,637 while the median price of $422,000 is up by 1.69 per cent.

The BMO report also found that: 47 per cent of Calgary residents (34 per cent in Alberta) feel the lower interest rates will have a positive impact on their overall financial situation; 35 per cent of Calgarians (34 per cent Albertans) say they are now more likely to pay off their current debts, while only 13 per cent (Albertans) and 18 per cent (Calgary residents) will be influenced to take on more; 47 per cent of Calgary residents (62 per cent Albertans) said the change will have no impact on their plans to buy a property.

Sal Guatieri, senior economist with BMO Capital Markets, said that low rates will support activity in the housing market and improve affordability in Canada’s hotter urban markets.

“Given the negative impact of lower oil prices on the Canadian economy, interest rates are likely to remain low for some time, supporting home sales – especially in Vancouver and Toronto where affordability is an issue,” he said.

– Calgary Herald

B.C. expands efforts to recruit Calgary workers

Richard Tuck is coming to Calgary this weekend to help build a new wave of tech talent. He hopes to leave with a handful of the best for his own Vancouver company.

The chief executive of Riipen, an online platform that connects students with companies on short-term projects, is among a growing number of B.C. businesses looking to Alberta to fill specific job shortages in that province.

It’s a trend that has turned the tables on Alberta and its years-long and far-reaching hunt for labour help as the provincial economy boomed.

More than a dozen companies will participate in a career fair at the weekend HTML500 event here Saturday, part of the largest learn-to-code event in Canada. The job fair, at the Red and White Club at McMahon Stadium and hosted by the Vancouver Economic Commission, will put local coding graduates face-to-face with tech employers.

“There’s so many tech companies and we’re looking for the best and brightest,” said Tuck, whose company now employs six people full time. “Are they already here in Vancouver? Who knows? But odds are no. So we want to look everywhere we can.”

About 1,000 people have registered for 500 spaces at the Calgary event, said Ian McKay, chief executive of the Vancouver Economic Commission.

“Vancouver has become one of the largest tech centres in North America, and tech is one of the fastest growing segments of our city’s economy, so we have a challenge that our demand far exceeds our supply of talent,” he said.

The Vancouver Economic Commission said the city has thousands of open jobs in tech, innovation and digital entertainment. The HTML500 platform will provide some immediate relief for local companies looking to fill these positions, said McKay.

“We know that there is a demand from people of all backgrounds, all businesses. We think it’s matchmaking supply and demand and there’s a huge supply of jobs in the tech sector in Vancouver and there’s an enormous demand for good people,” he said.

“If you look at the bigger, broader picture, we know that over the past 10 or 12 years, 400,000 bright young Canadians have taken off to the U.S. thinking that was their only option for a career in technology. So our objective is to make it very clear to them, wherever they live, that there’s an option and the option is in Vancouver.”

For years, Calgary companies, politicians and economic development officials have travelled the country and farther afield to recruit workers. With oil prices in a tailspin and the threat of a recession hanging over Alberta, energy companies have been slashing budgets and workers.

It’s an opportune time for outside employers and politicians looking to fill their own labour needs by recruiting workers who suddenly find themselves unemployed or seeking a change.

B.C. Premier Christy Clark earlier this month appealed to unemployed oilpatch workers, saying her province needs skilled workers.

“Many workers from the oilsands who came from British Columbia will now be looking for work, so my call to them is come home,” Clark told delegates at a forest industry conference. “Come home, come home to your province where you were born and you want to raise your children.”

Clark said the B.C. government was considering placing billboard advertisements at the Fort McMurray airport that would appeal to former B.C. residents to return home for jobs.

ATB Financial chief economist Todd Hirsch said he doesn’t expect an exodus of workers from Alberta to occur, even with the increasingly negative economic climate.

“I do think we’re moving into a softer labour market and maybe we shouldn’t be surprised that now we are going to be perhaps a bit of a target of some of this labour poaching,” he said.

“For a long time, Alberta and Alberta companies, we’ve been going elsewhere to bring people here. In 2015, we might see a little bit of a reversal of that and that maybe isn’t such a bad thing. In fact, it might provide some opportunities for people who perhaps find themselves without work.”

A Statistics Canada study using tax data found about 29,000 British Columbians were working in Alberta in 2009 (the latest figures available). Last fall, for the first time in three years, more people from Alberta moved to B.C. than the reverse, according to B.C. Statistics data.

Amber Ruddy, senior policy analyst with the Canadian Federation of Independent Business in Calgary, said employee retention will be a priority for entrepreneurs.

“There is no doubt that many businesses will face challenges with the current economic downturn, but small businesses have the advantage of being nimble,” said Ruddy. “The last time we faced a recession, many entrepreneurs worked longer hours and cut their own wages to hold on to their valuable employees.”

Jeanette Sutherland, manager of workforce and productivity for Calgary Economic Development, said she expects workers to stay in Calgary, given the city still boasts one of the country’s strongest labour markets, even with the recent downturn.

“People’s outlooks and attachments to Calgary have changed. Compared to past downward cycles, we had fewer people leave in 2009 than in past cycles,” she said. “Our economy is more resilient today as it has ever been in the past. People see opportunities in Calgary, despite the recent decline in the price of oil.”

– Calgary Herald

Calgary MLS listings soar while sales plunge

Amid a constant barrage of negative economic news these days, Calgary’s resale housing market is seeing some dramatic swings in listings and MLS sales so far in January.

According to the Calgary Real Estate Board website, January MLS sales are down 34.8 per cent from the same period a year ago (from 842 to 549), while new listings have risen by 42.8 per cent to 2,262 and active listings are up by 75.2 per cent to 4,311.

That dynamic has affected the average sale price, which is down by 0.6 per cent to $457,853. The median price has dropped slightly as well by 0.3 per cent to $412,500.

Pending sales of 87 are down by 62.7 per cent.

Potential first-time homebuyer Steve MacLean, who works in oil and gas sales, said it’s an exciting and confusing time to buy a home right now but it could be a rare opportunity to purchase at a lower price.

“I’m renting right now,” he said. “The rental market in Calgary is crazy. It’s a ton of cash to rent a unit here in Calgary  and it just doesn’t make sense to rent anymore if you can jump out and get yourself into a mortgage where you’re putting that cash towards something you can call your own rather than just seeing it vaporize.

“I’m not in a panic to buy. . . . Let’s just see if I can scoop up a deal here. I feel I’m in as good a position as I could be for sure. I don’t think we need to buying at 2014 prices when we may be able to buy something at let’s say a 2010 or 2009 price here. Patience is going to be key in the market.”

Phil Soper, president and chief executive of Royal LePage,  said when you see a sharp change in the number of house sales and new listings in a very short period of time  it’s because the buyer or the seller is expecting further change in the market.

“So in Calgary right now, we’ve got buyers who are expecting that there might be an opportunity to purchase a home for a discount over recent value. So they’re delaying transactions in the hope that they see some movement in prices,” said Soper. “In the meantime, when those transactions aren’t going through that normally would have, people who in normal course would have been listing their home, they start to get piled up and you start to see inventory grow.

Soper says the volatility is a natural reaction to the sharp and unexpected drop in the price of oil.

“It will be interesting to see if some of that bottleneck clears when two things happen. One, the real market begins. January is a poor proxy for how the year is going to unfold because it’s typically the slowest month on the calendar for real estate transactions. It will be interesting to see the impact of further stimulus in the way of lower mortgage rates and the arrival of the true spring market which we’re probably about four weeks away from the leading edge. At that stage, we’ll have a better handle on how things are going to unfold in Calgary and how seriously lower oil prices have damaged consumer confidence.”

Don Campbell, senior analyst with the Real Estate Investment Network, said the city has just passed the magic six-month oil decline mark when traditionally the housing market begins to feel the impact of loss of confidence.

“The first statistic to show up is increase in listings on a year-versus-year comparison, then the next to increase, as sales demand drops, will be active listings as the large number of new listings pile onto the un-solds,” he said.

“This is when the tipping point begins and the market turns to a true buyer’s market, where sellers no longer have the advantage.  A buyer’s market then leads to the inevitable decrease in average selling price and then to the dreaded layoffs in the new home construction industry  — historically nine to 10 months after the beginning of oil price drops. The limiting factor to all of this is length of time oil stays in the $40s or below.  The longer the time, the less activity in the market, thus an even more propensity for average sale prices to drop.”

According to Mike Fotiou, associate broker with First Place Realty, the month-to-date sales for the first three weeks in January are the second lowest level in 15 years. The lowest was recorded in 2009 after the economic downturn in the fall of 2008.

Ann-Marie Lurie, CREB’s chief economist, said there could be a number of reasons that new listings are increasing but she said last year was a very low year for listings. She said a 10-year average for January is about 2,900 for listings. The five-year average is about 2,600.

People may be committed to another home. They may have lost their jobs in recent oilpatch layoffs. They may be concerned about the future. Maybe they’re just testing the market. Lurie said it’s hard to speculate at this time the reasons for the rise in new listings from a year ago.

“We have to keep in mind that last year we didn’t have very many new listings come onto the market,” she said. “That’s partly why you see that big increase in percentage.”

The impact to the overall resale housing market of increased listings is relative to what is happening in sales activity, added Lurie.

“That’s the one area I’m looking at. If listings go up and the demand is there, it doesn’t necessarily cause that rise in supply. It keeps market conditions relatively balanced,” she said. “However, if that pullback continues in demand — we’ve seen it, you’re starting to see that those sales are coming off and coming off at fairly strong rates at this point — what could happen is if you have the listings rise it gives more choice in the market but because of that if the demand isn’t there that can impact obviously that balance in the market and could push it closer towards that buyer’s territory.

“If that demand falls and that pace of fall continues, and you still have these listings and they don’t tend to ease off, it impacts the balance in the market and obviously influences pricing as well.”

Soper said the Bank of Canada’s drop this week in its trend-setting interest rate, to 0.75 per cent from one per cent, should stimulate the housing market from coast-to-coast.

“The degree the market responds really depends on the trading area we’re talking about,” he said. “In areas of the country where lower oil prices can actually be seen as an economic stimulus, such as Ontario, we believe it will have a significant impact on activity and price levels. In areas of the country, such as Alberta, where lower oil prices are clearly a drag on the economy, we think its impact will be more muted. However, it will still have a positive impact.”

-Calgary Herald

Calgary single-family home lot count at lowest level in years

The number of serviced, single-family lots ready for home construction has dwindled to its lowest level in at least 17 years.

A survey by the Borger Group of Companies, done late last fall, found that only 4,423 lots were available compared with 5,888 for 2014, 6,698 for 2013 and 7,575 for 2012. For 2003, the company counted 9,247 lots.

Bill Borger, president of the earth-moving company with more than 350 employees, said it has been conducting the lot count now for more than 50 years. The Borger team counts every vacant, serviced lot in the city that has a sewer and water connection.

“It is 20 per cent lower than anything we have on record which we don’t have records pre-1997 now,” he said. “But it’s lower than anything we have on record. This is the lowest amount in at least 17 years – probably more.

“We do the lot count, and the reason it started, is to kind of get a gauge of how busy we’re going to be for staffing or equipment purchases. And it’s usually fairly accurate barring major fluctuations in oil and the world economy that can change everything.”

Borger said the lot count means there is less than a year’s worth of inventory of single-family lots available to build a new home.

Taking into account the surrounding areas outside Calgary, total serviced, single-family lots dropped to 7,769 from 9,603 in 2014, 10,750 in 2013 and 11,043 in 2012.

According to Canada Mortgage and Housing Corp., the number of single-detached starts in the Calgary census metropolitan area peaked in 2006 at 10,482. Last year, there were 6,494 starts and the agency is forecasting starts to decline to 6,400 this year and to 6,300 in 2015.

“We are aware of the Borger report and understand that it is a count, taken in November 2014, of vacant single family and semi-detached lots that have service connections and are ready for construction of the home to begin.   We were not involved in the count and cannot confirm the numbers provided or how they relate to those provided in previous years.  The City is actively working together with the development industry to report on the land supply based on the data collected in 2014.  Progress on this work is going well and we expect to share this report in the coming weeks,” wrote Joel Armitage, project lead for Build Calgary, director of the office of land servicing and housing for the city, and president of the Calgary Housing Company, in a statement.

Guy Huntingford, chief executive of the Urban Development Institute, said the organization has been working with the City of Calgary on developing a monthly lot supply report. He said the definition of a serviced lot and what people believe to be serviced sometimes can get confusing.

“One of the reasons we really want a monthly report is that those oscillations that happen when you only do something once a year get taken out. They’re constantly being updated every month,” said Huntingford. “We’re almost there. We’re hoping to have in the next couple of weeks a meeting where we’re going to show the developers and builders –  and the city’s going to actually be at this meeting – and say here’s what we’ve got, here’s what we found and here’s where we’re at right now.

“There’s a recognition though, that due to the fact we did have a very good in-migration for the last couple of years, there’s no question we’re absorbing at a fast pace and it’s not surprising that the lot counts are down. But we need to see what’s coming down the pipe as well to help fill it back up.”


-Calgary Herald


Real estate firm predicts Calgary housing prices will rise despite oil slump

A national real estate firm is predicting prices in Calgary’s resale housing market, and across the country, will continue to increase in 2015 despite low oil prices.

In releasing its house price survey and market survey forecast Wednesday, Royal LePage said the average price in Calgary will climb  2.4 per cent from 2014 to $472,000 while the Canadian average price will see a 2.9 per cent hike to $419,318.

It said the recent drop in oil prices did not impact the overall real estate market in the fourth quarter of last year.

Royal LePage said Calgary saw healthy price increases in all categories in the fourth quarter with average prices for detached bungalows jumping 9.1 per cent year-over-year to $511,889 and standard two-storey homes increasing 8.5 per cent to $500,320. Standard condominiums also experienced robust growth, rising 9.1 per cent to $311,644, it said.

“The Calgary market was one of the hottest in the country, with all three major housing categories seeing near double-digit price growth over this time last year,” said Ted Zaharko, broker and owner of Royal LePage Foothills, in a news release. “There remains a structural imbalance between the availability of homes and number of eager homebuyers. This fundamental discrepancy between supply and demand explains why we’ve seen such aggressive price appreciation in 2014.

“Inventory availability remains a major issue across the city, as frustrated buyers are chasing a limited number of homes. The one exception is condominiums, where new units are being built at a faster rate.”

Nationally, the average price for bungalows rose by 6.7 per cent to $406,218. Two-storey homes were up six per cent to $443,379. Condos were also up by 4.5 per cent to $257,624.

“For our 2015 forecast, we could not ignore the potential impact of the steep decline in the price of oil on housing markets across Canada,” said Phil Soper, president and chief executive of Royal LePage. “In the immediate term we anticipate that the natural slowing of home price appreciation we called for in the third quarter of 2014 will be delayed in Central Canada and accelerated in the West by recent developments in the energy sector.”

Zaharko said fourth-quarter MLS sales were up from the same period last year but down from the “heightened” levels seen earlier in the year.

“While we expect price rises may moderate in 2015, the upward trend we’ve seen over the past few years is unlikely to reverse without a meaningful increase in inventory,” said Zaharko.

“Oil is a major economic influence in Calgary, so the recent price drop is worrying. While we believe there may be some immediate term impact on the local housing market in the form of slowed appreciation, there would need to be prolonged low oil prices for any spillover into the housing market to be significant.”


-Calgary Herald

Calgary home sales expected to decline due to oil market uncertainty

Cracks are starting to appear in the once-solid Calgary residential real estate market.

Three separate reports, released Wednesday, all made mention of the potential negative impact that lower energy prices will have on the local resale housing sector this year.

The Calgary Real Estate Board is forecasting overall MLS sales to fall by four per cent “due to market uncertainty and changes in economic climate” but it says prices are expected to remain relatively stable with a modest increase of 1.6 per cent on an annual basis.

At its annual forecast breakfast on Wednesday, CREB warned there are multiple risk factors attached to the forecast, which estimates 24,503 MLS sales will take place in the city this year.

Prices for repeat home sales in Calgary fell by 1.1 per cent in December from November, according to the Teranet-National Bank National Composite House Price Index.

Also, a report by Royal LePage forecast a 2.4 per cent hike in prices in Calgary this year but the company’s president and chief executive, Phil Soper, said the natural slowing of home price appreciation will accelerate in the West due to recent developments in the energy sector.

Ann-Marie Lurie, CREB’s chief economist, said the housing risks lie mainly with employment levels and net migration, both of which can be more severely impacted by a prolonged period of weakness in the energy sector.

“There is also the impact that energy prices have on consumer confidence. If energy prices stay low throughout the year, concern regarding job stability could cause consumers to delay unnecessary changes regarding housing,” she said.

The CREB report said sales will remain consistent with long-term levels and 2014 sales were close to 15 per cent higher than the long-term trend.

“The economic situation is far better today than what is was in 2009, where the fallout of the financial crises resulted in a U.S. recession, weakness in energy sectors, a pullback in investment and ultimately job losses in Calgary,” said Lurie. “With economic indicators remaining more positive in this period, the pullback in housing is not expected to mirror activity during the 2009-2010 period.”

She said the initial impact is that the market will see a fall in demand but the overall market was tight as it moved into the current oil price environment.

“We were in seller’s market conditions. We had a lack of inventory. So even with demand falling and some improvements in supply, there is a lot of room to absorb there some of that increase that we’ll have and move us into really more normal conditions,” said Lurie. “I mean we’ve had a lack of inventory for some time.

“People in this city are used to this type of thing. We know what happens in the energy sector. The consumer confidence, what we’re concerned about is, if people are worried about will they have a job in the next year, two years, what will be their employment status, what are they facing, they’re less likely to make major purchase decisions like homes. That can pull off some of that demand in the market. So you could see some of those sales levels fall.”

Last year, total MLS sales in Calgary were up 9.3 per cent, at 25,664. The average sale price of $483,079 was 5.8 per cent higher than 2013. The local market also saw new peaks for condo apartment and townhouse sales. But as the year ended, the market was showing signs of shifting.

December marked the first month in nearly two years that MLS sales were down compared with previous-year numbers — breaking a string of 20 consecutive year-over-year gains. However, average sale prices rose for the 35th consecutive month. Total sales in December of 1,083 were down by 7.5 per cent from a year ago while the average price of $475,036 was up by 4.5 per cent.

“We have hit the six-month oil price decline market. This has traditionally been the moment when the low oil price begins to be reflected in the housing market. This is currently being reflected in the dramatic increase in number of listings shown in the CREB statistics,” said Don Campbell, senior analyst with the Real Estate Investment Network.

“This shift to a buyer’s market will then be reflected in average sale prices in February, March and April as they flatten or slide slightly into negative territory.”

According to CREB data, there were 275 sales for the period of Jan. 1 until Tuesday — down 29.1 per cent from the same period in 2014. The average sale price of $449,391 is down 3.9 per cent while the median price of $411,000 has risen by 1.1 per cent. New listings of 1,101 are up by 36.4 per cent and active listings of 3,695 have risen by 55.1 per cent.

“Calgary’s housing market tends to follow the ups and downs in oil prices. Given the recent collapse in oil prices being on order of magnitude similar to what was observed back in 2008-09, it’s possible that housing activity and prices might follow similar paths as back then,” said David Madani, economist with Capital Economics.

“Unfortunately, with household debts higher, interest rates already ultra low and government budgets tighter, policymakers have less scope to support the economy this time around.”

CREB president Corinne Lyall said buyers will likely have more alternatives in all price ranges, with more supply in the market expected this year.

Lyall said it was important to keep an eye on the economic indicators.

“I think the biggest concern right now is exactly . . . ‘should I be selling my house right now or not?’ I think the important thing to remember is that people sell for different reasons. Every motivation is different. I think they really have to think about that before they just decide to throw their house on the market. Do they really need to move?

“People are just asking ‘if I do have to move is now the right time or should I wait?’ They just want some advice from their real estate agents as to what direction to go really.”

The repeat home report said prices fell by 0.2 per cent in December across the country in 11 markets surveyed.

However, Calgary led the country with an 8.3 per cent year-over-year hike while the Canadian average spike was 4.9 per cent.

The index is estimated by tracking ob­served or registered home prices using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.”

“The slump in world oil prices will hit oil-producing regions hard, and it won’t be long before housing activity and prices begin to fall significantly in Calgary,” said Madani.

Jonathan Bendiner, economist with TD Economics, said Calgary and Edmonton closed out 2014 with solid year-over-year gains but the recent plunge in oil prices is likely to temper housing activity in these markets this year.

“Indeed, the drop in oil prices is expected to weigh on employment and income growth in these markets over the near-term as the low oil price environment persists,” he said.

In releasing its house price survey and market survey forecast Wednesday, Royal LePage said the average price in Calgary will climb  2.4 per cent from 2014 to $472,000 while the Canadian average price will see a 2.9 per cent hike to $419,318.

Royal LePage said Calgary saw healthy price increases in all categories in the fourth quarter with average prices for detached bungalows jumping 9.1 per cent year-over-year to $511,889 and standard two-storey homes increasing 8.5 per cent to $500,320. Standard condominiums also experienced robust growth, rising 9.1 per cent to $311,644, it said.

“The Calgary market was one of the hottest in the country, with all three major housing categories seeing near double-digit price growth over this time last year,” said Ted Zaharko, broker and owner of Royal LePage Foothills. “There remains a structural imbalance between the availability of homes and number of eager homebuyers. This fundamental discrepancy between supply and demand explains why we’ve seen such aggressive price appreciation in 2014.

“While we expect price rises may moderate in 2015, the upward trend we’ve seen over the past few years is unlikely to reverse without a meaningful increase in inventory . . . Oil is a major economic influence in Calgary, so the recent price drop is worrying. While we believe there may be some immediate term impact on the local housing market in the form of slowed appreciation, there would need to be prolonged low oil prices for any spillover into the housing market to be significant.”


Calgary Herald

Luxury home market hit new heights in Calgary

Homebuyers last year had an appetite for luxury product — from the resale market to new projects not yet built, like The Concord, a proposed development near the banks of the Bow River in Eau Claire, where a condo sold last fall for $7 million.

“We’re roughly close to 50 per cent sold in the first tower and we’re not even breaking ground until late March,” said Grant Murray, vice-president of sales for The Concord.

“I think in most cases our buyers are very mature and investment savvy. They’re kind of in the range where I don’t think, unless there was a prolonged period where the oil prices were going to stay down, I don’t think it’s having any effect on these people.”

Murray said five of seven estate penthouses in the development at 6th Street and 1st Avenue S.W. have sold for between $3.5 million and $7 million.

Vancouver-based developer Concord Pacific plans to build 218 luxury residences in two towers, including a $13-million penthouse. Construction on the 14-storey, 105-suite West Tower is expected to start in March with completion by fall 2017. The East Tower — 113 units over 17 storeys — is to be completed six months to a year after the first tower.

A Sotheby’s International Realty Canada report, released Wednesday, said fluctuations in oil prices introduced uncertainty into Calgary’s top-tier market in the fall, but had a nominal impact on sales as of the end of 2014.

It said historically low mortgage lending rates, a solid Canadian economy and ongoing migration and foreign investment into the country’s major cities offer the luxury market some stability heading into 2015.

“continued uncertainty in the oil market will impact Calgary real estate over $1 million, however, the degree of influence is still unknown. If employment and migration into the city remain at expected levels, sales are expected to remain on pace into early 2015,” the report states.

Calgary saw a 14 per cent increase in property sales over $1 million in the second half of 2014 compared with a year earlier, it said, despite the sudden decline in global oil prices.

Ross McCredie, president and chief executive of Sotheby’s International Realty Canada, said there is cautious optimism heading into 2015.

“No one is panicking right now,” he said McCredie, adding most buyers of high-end properties have built their wealth over a number of years.

“Those buyers understand cycles. They’re resilient. I think they know that $50 a barrel oil is not going to be the long-term outcome here … They’re pretty confident that things will come back,” he said.

Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said there is always going to be demand for certain types of homes.

“It’s a matter of what will happen because of oil prices,” she said. “It’s not really about the oil prices. It’s about the demand and what happens if incomes are affected. And really we’re looking at what’s going to happen to corporate bonuses and what will that do for people who are looking to move up? Some people it really doesn’t impact that much. So it depends on their financial situation.”

Lurie said the share of luxury resale homes to the overall market in Calgary has kept increasing over the past few years. Currently, it’s about six per cent. In 2008, it was about 3.6 per cent of the market.

According to CREB, MLS sales of properties more than $1 million reached a record 854 transactions in 2014, up from 726 in 2013 and 544 in 2012.


-Calgary Herald