Calgary luxury home sales surging in 2010
By Mario Toneguzzi,
Calgary Herald
April 27, 2010 6:51 AM
CALGARY - Affluent purchasers moved in the first quarter to take advantage of low interest rates, pushing luxury home sales in Calgary to nearly double what they were a year ago.
Although the high-end market is not on fire like it was a couple of years ago during the real estate boom, it has picked up dramatically from the recession in 2009.
In Calgary, for the first quarter of this year, 67 upper-end properties valued at more than $1 million were sold compared with 35 during the same period last year.
"We felt it in the last quarter of last year with the surge of first-time buyers coming into the market and it creates a catalyst all the way through. It just took a matter of time before it hit the upper-end market really," said Christina Hagerty with Re/Max Realty Professionals.
"There's an overall confidence seen in the Calgary market again. Specializing in the inner city, surprisingly, a good 20 per cent of people I've been speaking with are coming in from other places," said Hagerty.
Those places include Toronto, Vancouver, London and South Africa.
Hagerty said the overall real estate market should experience moderate growth in the years to come, and most likely increases in both prices and in the number of sales by three to five per cent in 2010.
People looking to buy at the $800,000 to $1-million range are taking their time.
"We're not really having bidding wars. We're seeing corrections in the market as well. I think this is one of the last price ranges to make a correction. And now that they're correcting, the buyers are buying them," said Hagerty.
Many of today's luxury buyers are taking advantage of favour-able market conditions to trade up to larger homes or better neighbourhoods, said the Re/ Max Upper End Market Trends 2010 report.
The Re/Max report said older, established areas such as Mount Royal and Elbow Park are popular with upscale purchasers looking for easy access to downtown, while Bearspaw, Elbow Valley and Springbank offer high-end buyers "more bang for their buck -- with country homes typically situated on sprawling lot sizes."
In Calgary, sales of luxury homes still lag 2008, when 86 were sold; 2007, with 124; and 2006, with 86.
The most expensive sale on MLS this year in Calgary was for $5.75 million in Elbow Park.
Re/Max said homebuying activity has improved significantly in the city over the past 12 months, but "purchasers are still cautious, especially in the top end of the market."
The report said some overpriced homes continue to linger on the market with "many risking stagnation."
The recent strength in the local market is due to low interest rates, said Dan Sumner, economist with ATB Financial in Calgary.
"Now the world is looking a little bit more stable," he said. "A lot of these people who were maybe finding the market too expensive in 2007 and 2008, and also a little bit more competitive then, are now saying, 'Hey, we lock into a low interest rate, prices are down a little bit . . . and maybe we can move up from the mid-priced home to the high-end home."
The Re/Max report, which highlighted sales and trends in 13 major Canadian centres and five sub-markets, found that virtually all areas experienced double-and triple-digit increases between January and March of this year over 2009 figures for the same period.
Nine out of the 13 markets examined set all-time highs for first-quarter activity in the upper end.
"Recovery in the upper end has been nothing short of remarkable," said Elton Ash, regional executive vice-president at Re/Max of Western Canada.
