High-end resale sign of health
By Marty Hope
Calgary Herald May 27, 2011
Overall, Calgary’s housing markets have been struggling to regain ground lost to the economic downturn — and it’s been a tough fight.
The resale industry found itself saddled with a huge inventory when consumers turned fickle and decided the housebuying binge of the early part of this decade was ending.
They went into hibernation and are now gradually coming back into the market.
The economic fundamentals — job creation, migration and salaries — are improving and in general, so is the housing outlook.
A look at one specific segment of the resale sector is proof the economy is coming back.
A few years back, I had a chat with a realtor who told me that as long as the high end of the resale market was active, the economy was in good shape.
People buying in those price categories wouldn’t be spending that kind of money if they had any notion the economy was in trouble.
If figures from the Calgary Real Estate Board are any indication, everything is humming along.
For the first four months of this year, 437 resale properties priced at $700,000 or more changed hands compared with 368 for the same period last year — and were selling faster.
On the heels of these impressive numbers came a report from Re/Max regarding activity at the upper end of housing markets in 12 major centres in Canada.
The report says that improved financial standing among people with high net worth is the major factor driving strong resale activity at the top end of Canadian housing markets.
It found that luxury home sales surged in nearly two-thirds of housing markets from January to April compared to the same period in 2010.
In terms of percentage gain, the largest growth occurred in Greater Vancouver at 118 per cent, followed by Ottawa at 59 per cent and Calgary at 51 per cent.
Greater Toronto was well down the list at nine per cent.
On the new homes front, Calgary builders continue to cater to a growing number of buyers looking for large homes in inner-city communities, estate neighbourhoods in the suburbs, and acreages in rural areas surrounding the city.
“The upper end of the market is vibrant,” says Jim Quinn, president of QuinnCorp Holdings Inc., which is developing Aspen Estates on the west side of the city.
“Calgary has a deep pool of wealth. It’s quiet, reserved and subtle, but it’s there.”
PRICE IS RIGHT
The pace of the resale market is growing for homes with larger price tags, says the Calgary Real Estate Board.
“We are seeing improvements in the sale of homes in the higher price points,” says board president Sano Stante.
“Homes above $700,000 are selling within an average of 41 days. This is consistent with pre-recession levels.”
