Cal­gary’s lux­ury homes mar­ket firmly in buy­ers’ ter­ri­tory

Calgary Sun - Homes - - Homes - Myke Thomas CALGARYSUN

Cal­gary’s top-tier homes mar­ket ($1 mil­lion-plus) is not im­mune to the eco­nomic re­al­i­ties that are grip­ping the city, says a new re­port from Sotheby’s In­ter­na­tional Re­alty Canada.

“Fol­low­ing a con­trac­tion in $1 mil­lion-plus real es­tate sales in the first half of 2018, the City of Cal­gary’s top-tier real es­tate mar­ket is con­fronting new eco­nomic head­winds that threaten its re­cov­ery this fall,” says the re­port. “In re­cent months, in­dus­try and con­sumer con­fi­dence have fal­tered in light of the city’s ris­ing unem­ploy­ment rate, which rose to 8.2 per­cent in Au­gust 2018.

“A pull­back in Western Cana­dian heavy oil prices, the set­back for Trans Moun­tain pipe­line con­struc­tion fol­low­ing the Fed­eral Court of Ap­peals’ Au­gust 2018 de­ci­sion to over­turn its per­mits, and an over­all de­cline in cap­i­tal spend­ing in the city’s pri­mary in­dus­tries have damp­ened con­sumer con­fi­dence.”

The tight­ened mort­gage qual­i­fi­ca­tion reg­u­la­tions in­tro­duced this year along with ris­ing in­ter­est rates (with more in­creases in the off­ing) have added to the malaise, with Sotheby’s see­ing in­creased sup­ply in all seg­ments of the top-tier mar­ket (sin­gle­fam­ily, at­tached and con­do­minium), putting fur­ther down­ward pres­sure on prices in an al­ready volatile mar­ket, says the re­port.

“Year-to-date top-tier real es­tate sales trends re­flect mar­ket fragility, and un­der­score the fore­cast for un­pre­dictable fall mar­ket per­for­mance. Fol­low­ing an 11 per­cent de­cline in $1 mil­lion-plus real es­tate sales (con­do­minium, at­tached homes and sin­gle-fam­ily homes) in the first six months of 2018, sales in­creased nine per­cent year over year to 122 homes sold in July and Au­gust of 2018,” it says. “Sin­gle-fam­ily home sales of more than $1 mil­lion made up the ma­jor­ity of trans­ac­tions, and in­creased 15 per­cent year over year to 109 units sold in 2018.

“Cal­gary’s lux­ury con­do­minium mar­ket re­mained quiet, with three units sold over $1 mil­lion in the sum­mer com­pared to two in July and Au­gust of 2017.”

Sotheby’s col­lected its data on the Cal­gary mar­ket in the first two weeks of Septem­ber 2018, which showed a year-overyear in­crease.

“Pre­lim­i­nary sales data from the first 15 days of Septem­ber re­flected 21 sales over $1 mil­lion com­pared to 18 dur­ing the same pe­riod in 2017,” says the re­port. “While an en­trenched buy­ers’ mar­ket is fore­cast for Cal­gary’s top-tier mar­ket this fall, Sotheby’s In­ter­na­tional Re­alty Canada in­dus­try ex­perts cau­tion that pend­ing in­ven­tory will be the de­cid­ing fac­tor in fall mar­ket con­di­tions and hous­ing val­ues. There is a mount­ing risk that ris­ing sup­ply will place down­ward pres­sure on prices this fall.”

Not the best of news for sell­ers, but en­cour­ag­ing for buy­ers.

POSTMEDIAFILE

A buy­ers’ mar­ket is fore­cast for Cal­gary’s top-tier mar­ket this fall. An in­creased sup­ply of homes priced at $1 mil­lion or more can be seen in all seg­ments of the mar­ket, with ex­perts cau­tion­ing that ris­ing sup­ply could place down­ward pres­sure on prices.

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