Day: January 15, 2017

Calgary Real Estate News

High-end home sales in Calgary to continue rebound, Sotheby’s says

Sotheby’s International Realty Canada says it’s expecting a buyers’ market for luxury homes in Calgary in the first quarter of 2017 following a lift in sales last year.

After declining 40 per cent year-over-year in 2015 due to the sudden plunge in oil prices, sales of homes worth $1 million or more rose 19 per cent, to 612 properties, in 2016.

The realtor released a report Wednesday that looked at sales of homes for more than $1 million in Calgary and three other cities — Toronto, Montreal and Vancouver.

It said high-end sales activity in Calgary stabilized last year as prices better aligned with buyers’ conditions. Sales of $1 million-plus single-family homes grew 22 per cent year-over-year to 548 properties. Nineteen luxury condo units sold for $1 million or more. 

Toronto is poised to lead the country in high-end home sales for a third consecutive year, Sotheby’s Canada said.

It concluded 19,692 such properties were sold last year in the Greater Toronto Area — an increase of 77 per cent compared to 2015. Sales of homes worth more than $4 million in the GTA rose 95 per cent year-over-year to 290 properties.

In Vancouver, high-end home sales started off strong but slowed in the second half of the year as a number of government policy changes took effect. They included a one-per-cent tax on vacant homes implemented by the City of Vancouver and the B.C. government’s 15 per cent tax on foreigners buying homes in Metro Vancouver.

Those changes amplified a cooling in the Vancouver real estate market that started over the summer, Sotheby’s said.

Sales in Vancouver’s $1 million-plus market were down 34 per cent year-over-year in the second half of the year compared to the same period in 2015. But on an annual basis, sales of Vancouver homes worth $1 million or more were relatively flat last year, down one per cent year-over-year to 4,515 properties.

Luxury home sales were up 36 per cent year-over-year in the city, with 573 properties priced at more than $4 million trading hands.

The realtor says global turmoil — including Britain’s vote to exit the European Union and Donald Trump’s election win in the U.S. — injected uncertainty into global real estate markets last year.

Canada, which is regarded as a haven, has a low dollar and a strong real estate market, making it a desirable destination for real estate investment and immigration, the report said.

– Calgary Herald

Calgary Real Estate News

Calgary awash in homes without owners as new condo projects flood market

Calgary is awash in newly built homes that remain unoccupied — hitting levels not seen in 15 years — as an influx of condo projects comes at a time of muted demand, according to housing data.

The surge in supply has not scared off all developers in the city, with a number of new projects on the horizon. But some are converting their condo proposals into rentals, which they view as a better investment as the economy slowly turns the corner on a prolonged slump.

The city had about 1,500 newly constructed housing units that were vacant in December, a stunning glut not seen since June 2001, according to the Canada Mortgage and Housing Corp. More than half of the current stockpile, about 800 units, were apartment-style condos.

“Very pricey homes have taken a beating,” said Brian Kernick, president of Greenview Developments, which plans to break ground in the coming weeks on a 65-unit low-rise condo building in Inglewood.

“There are still areas of the market where there is demand, even though the economy has taken a hit lately.”

Highrise condo projects that were planned pre-recession have been finished in the rout, driving up supply during a period of weak demand.

Smaller projects “don’t get over-built like highrise condos do, because they don’t take as long (to build),” Kernick said. 

Canada’s national housing agency expects fewer new apartment and row-house projects will get off the ground this year as the focus turns to selling existing inventories of new homes.

“Later in 2017, these inventory levels should be moving lower,” said Richard Cho, analyst at Canada Mortgage and Housing Corp.

Many prospective buyers have been nervous about putting their money down for new housing at a time of high unemployment and low commodity prices, said Chris Pollen, director of sales and marketing at Battistella Developments, which is planning a condo tower for East Village in 2018.

The City of Calgary received 27 development permit applications for condo projects worth more than $10 million in the last six months of 2016.

Four of them, including an $18.7-million apartment development in Mahogany and a $15.8-million building at Legacy Park, have been approved so far.

“Demand is low but it’s not gone,” said Calvin Buss, who specializes in designing and marketing large condo projects in Calgary.

Several developers that have approached his company recently have found they couldn’t charge high enough prices for condos in the current market to build their projects economically.

Three out of four condo projects that have come across Buss’ desk in the past few months have converted to rental developments. The theory is that builders would have to sell condos at a loss now, or they could build rental apartments and take a loss on rents — but only until the economy recovers.

“If you build a tower and you have to rent it out for two years at 15, 20 per cent below market value, you eat it for those two years, and in the next 20 years, you make it all up again,” Buss said.

-Calgary Herald