Calgary has healthy share of top income earners

Median income of top tax filers $293,800

By Mario Toneguzzi, Calgary Herald January 28, 2013

 

CALGARY — The top one per cent of Canada’s 25.5 million tax filers accounted for 10.6 per cent of the nation’s total income in 2010, down from a peak of 12.1 per cent in 2006, according to Statistics Canada.
And the federal agency reported Monday that people in Calgary and in Alberta are well represented in that high income bracket.
Calgary had 27,300 tax filers in the top one per cent in 2010. However, between 1989 and 2010, its share of the national total more than doubled from five per cent to 11 per cent.
Statistics Canada said the median income of the top one per cent of tax filers who lived in Toronto was $301,200 in 2010, while in Calgary, it was $293,800. The top one per cent in Calgary held 26 per cent of the metropolitan area’s total income, while those in Toronto accounted for 18 per cent.
Ben Brunnen, chief economist of the Calgary Chamber of Commerce, said having so many high-income earners in the city leads to stronger benefits for the overall economy.
“From a trickle down perspective, we see it in some of the bigger indicators. Whether it’s the retail spending of Alberta being among the highest in the country, the highest average weekly earnings that we as Albertans enjoy, that means more money to be spent on consumption. Restaurants. Big ticket items. Those types of things,” said Brunnen.
“When we see the significant numbers of high income earners here in Calgary it has a positive impact for all sectors of the Calgary economy.”
It also fuels job growth in areas where high income earners are spending their money, he said.
Todd Hirsch, senior economist with ATB Financial, said many very highly-educated people have been moving to Calgary in recent years.
“And corporate Calgary over the last couple of years has done very well,” he said. “So maybe it’s not surprising that some of these incomes are doing so well.
“From an economic point of few, it’s really beneficial. Two reasons. One is it provides a nice stable tax base for the government and especially right now when the government is going to be needing all of those tax revenues . . . And those higher incomes are supportive of other sectors of the economy, notably retail and the housing market.”
In 2010, four provinces – Ontario, Alberta, Quebec and British Columbia – accounted for 92 per cent of the 254,700 people in the top one per cent.
Ontario had 110,300, followed by Alberta with 52,200, Quebec at 42,600 and British Columbia with 29,500.
Between 1990 and 2010, Alberta’s share of the top one per cent of filers doubled from 10 per cent to 20 per cent, while Ontario’s proportion fell from 51 per cent to 43 per cent, said Statistics Canada.
The five largest census metropolitan areas – Montreal, Toronto, Calgary, Edmonton and Vancouver – accounted for 62 per cent of the top one per cent of tax filers in 2010. In contrast, these five metropolitan areas had 42 per cent of all tax filers.
In 2010, a tax filer required an annual income of $201,400 to be in the top one per cent. This was 37 per cent higher than the threshold value of $147,500 in 1982, when the data series began.

The federal agency also said the income gap between the top one per cent and the rest of filers has widened over time. In 1982, the median income of the top one per cent of filers was $191,600. This was seven times higher than the median income of $28,000 for the other 99 per cent of filers.
By 2010, the median income of the top one per cent of filers increased to $283,400, about 10 times higher than the median income of $28,400 for the rest.
mtoneguzzi@calgaryherald.com
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Calgary luxury home market sales growth best in Canada

 

By Mario Toneguzzi, Calgary Herald January 12, 2013

 

CALGARY — Calgary led the country in 2012 in sales growth for the luxury home market, according to firm Sotheby’s International Realty Canada.
Ross McCredie, president and chief executive of the real estate company, said Calgary is the “best performing market in Canada right now in terms of growth.”
“The trend has been upward and we don’t see any sign of that changing for awhile,” said McCredie. “There’s more and more investment coming into Alberta. More and more people are moving there. You’ve got a range of jobs. It’s not just simply oil and gas companies that are investing there.
“In the rest of the country, there’s definitely a trend going west and Alberta is probably leading that trend in terms of companies investing in key offices across Canada as well as foreign companies coming in as well.”
He predicted double-digit sales growth for Calgary’s luxury home market this year which will outstrip the performance of other major centres across the country.
“Calgary is really starting to become a city of high net worth people and investment coming into the country,” said McCredie.
In its Top-Tier Real Estate Report, a biannual study highlighting market trends for the most expensive homes in Canada’s largest urban centres, Sotheby’s said the market for luxury homes is expected to gain momentum and “to generate increasing demand from both local and international buyers given strong economic fundamentals, historically low interest rates and a national unemployment rate that has hit a record four-year low.”
In Calgary, compared with the same July to December period in 2011, listings over $1 million were up 38 per cent and sales of real estate in the same category were up 21 per cent in the second half of 2012.
“The average days on market for homes over a million dollars increased slightly to 66 days and the percentage of properties selling over asking price dropped slightly to five per cent,” said the report. “High-end neighbourhoods like Elbow Park and Glencoe were among those to see strong demand.”
According to the Calgary Real Estate Board, the city experienced a record for MLS sales over $1 million each in 2012 with 544 transactions, eclipsing the previous record of 458 in the housing boom of 2007. In 2011, there were 446 luxury home sales.
In 2012, the luxury home market had 508 single-family home sales and 36 condo sales compared with 420 and 26 respectively in 2011.
CREB said 1,533 homes were listed for sale in Calgary over $1 million in 2012 — 1,408 single-family and 125 condo. In 2011, there were 1,352 luxury home listings — 1,253 single-family and 99 condo.
In 2007, the luxury home market had 1,242 listings for the year, comprised of 1,159 single-family homes and 83 condos.
“We saw such an increase in activity in the last two quarters of 2012,” said realtor Christina Hagerty, who recently joined Sotheby’s in Calgary. “The momentum was building up all last year and it continued over the holiday season. This should be a good indicator of the year ahead. With the dwindling supply, and the strong pulse on the street that ‘Calgary is where you need to be,’ properties priced at market, are selling. Buyers are not wasting any time. They have done their research and are ready to make an offer when the right one hits the market.”

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Average Calgary house price of $428,655 in 2012 a new record

Outpace housing boom peak of 2007

By Mario Toneguzzi, Calgary Herald January 7, 2013

 

CALGARY — Average house prices in Calgary reached a record level in 2012, outpacing the housing boom peak of 2007.
According to the Calgary Real Estate Board, there were 21,207 MLS sales in Calgary in 2012 at an average sale price of $428,655, eclipsing the previous record of $423,770 in 2007 when there were 26,611 transactions.
Ann-Marie Lurie, CREB’s chief economist, said the high average sale price was spiked by the high amount of sales in the luxury home market.
“We’ve had a lot more multi-million dollar sales,” she said. “And that really does tend to pull that average price up.”
In 2012, 544 homes sold for more than $1 million each in Calgary. The all-time record for luxury home sales in any month was set in May when 80 properties sold for more than $1 million each. The previous high for most luxury home sales in an entire year was 458 during the 2007 housing boom.
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said average price growth within the city has been steady.
“There have been more people buying homes and the supply of homes has also come down. However, the gain in the average price has not all been due to stronger price pressures. The proportion of homes sold had shifted in 2012 with more higher-priced homes being sold.”
Lurie said CREB’s benchmark price tells a slightly different story than the average sale price. The benchmark price is based on the typical home sale which considers things like square footage, lot size, number of bedrooms, location, age of the property and developed basement.
The benchmark price in Calgary in 2012 was $381,408, up from $361,758 in 2011. The price peaked in 2007 at $404,950.
“We do expect to see the benchmark price continue to rise,” said Lurie.
Total MLS sales in the city in 2012 eclipsed 2011 levels but were well below the peak of 27,426 transactions in 2006. In fact, in the past 12 years, annual MLS sales were also higher in 2006, 2005, 2004 and 2002 than last year.
In 2011, there were 18,496 MLS sales in the city.
“We’re nowhere near the peak levels that you saw in 2006. We’re so well below there ... They really are just above what we saw in 2003. We’re really just running near a 10-year average,” said Lurie.
“It seems like it’s a lot of growth (from last year) but we were so weak for the past four years. Coming off the high period in 2007, everything kind of slowed and we’re just returning back to more normal levels. We’re slightly above what we saw in the early 2000’s. It’s not great but it’s not that bad either.”
Don Campbell, senior analyst and founding partner of the Real Estate Investment Network, said the organization for the last 18 months has been calling 2013 the watershed year for real estate in Calgary.
“The positive impact of the large influx of people from across the country to fill jobs in the province will really begin to be felt in the resale market in 2013. Then later in the year and early 2014 this impact will be felt in the new housing market,” he said.

An influx of people to the city, high rents, and strengthening consumer confidence are freeing up people’s capital to put towards homeownership, added Campbell.
He said the high average selling price in 2012 is also a reflection of the demand and “bargain-hunting” beginning to hit the higher end of the market.
“This trend will continue into 2013 but will now be coupled with full spectrum demand from entry level to mid level. This will, mathematically keep a cap on the average sale price movement, however 2013’s market is poised to be the strongest in years,” said Campbell.
mtoneguzzi@calgaryherald.com
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The following are MLS sales and the average sale prices for all properties in Calgary in the past few years.
2012 — 21,207, $428,655
2011 — 18,496, $414,391
2010 — 17,218, $409,885
2009 — 20,669, $394,064
2008 — 19,084, $413,293
2007 — 26,611, $423,770
2006 — 27,426, $358,326
2005 — 26,833, $256,327
2004 — 22,842, $227,269
2003 — 21,062, $215,838
2002 — 21,544, $203,203
2001 — 19,535, $186,586
2000 — 17,211, $180,420
Source: Calgary Real Estate Board

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Pace of Sales Not Expected to Slow into 2013

Calgary luxury home market sets record year

Pace of sales not expected to slow into 2013

By Mario Toneguzzi, Calgary Herald January 7, 2013

 

CALGARY — Calgary’s luxury home market has been on fire this year and that flame is expected to continue burning into 2013.
Sales of properties valued at more than $1 million set a record in 2012 and the increase in sales in this market from the previous year is taking place at a higher pace than overall residential MLS sales in the city.
Shayna Nackoney-Skauge, a realtor with RE/MAX Rocky View Real Estate, says buyers these days seem to be more confident about the economy as the activity level for sales and showings in the luxury market continues to rise.
“Pricing is very competitive and buyers are definitely getting deals. They’re getting motivated sellers,” she says. “My experience lately selling higher-end homes is that the listings that are selling are a little extra motivated to sell. Buyers are seeing that and getting deals on some great properties. I think activity levels are higher than previous years because buyers are feeling more confident but still wary not to be over-paying.
“I’m also seeing buyers putting more down on a house which shows confidence in the market. The pricing for brand new luxury homes is definitely quite competitive right now – there are some good deals out there for high-end home buyers. With the exception of older luxury homes that are in fantastic view locations on larger lots, it’s tough for them to compete with some of the brand new builds.”
In 2012, 544 homes sold for more than $1 million each in Calgary.
The all-time record for luxury home sales in any month was set in May when 80 properties sold for more than $1 million each.
The previous high for most luxury home sales in an entire year was 458 during the 2007 housing boom.
Don Campbell, president of the Real Estate Investment Network in Canada, says it will be a record year again in 2013 for the Calgary luxury home market.
“What we’re finding is the incomes are moving quickly and what we call a luxury market in Calgary is almost considered an average market in Vancouver and Toronto. The in-migration is not just about the blue-collar workers,” says Campbell. “There are a lot of executives ... moving into Calgary and they’re selling their properties in Vancouver and selling their properties in the Toronto area and Montreal and they’re coming here and going ‘I can get THAT for this price? I’ll take it’.”
Another pillar holding up the luxury home market in Calgary is consumer confidence, he says.
“When you’ve got consumer confidence coupled with three per cent interest rates and people are confident in their job and in their income, that’s the second pillar that’s going to hold up that luxury market,” explains Campbell.
Bob Jablonski, the Calgary Real Estate Board’s president, says the booming luxury home market is an indication that the people buying these types of homes are seeing strong long-term prospects for the city.
“Confidence in the marketplace. Stability. The fact we’re not like the rest of the country. They’re making adjustments as far as prices. And they’re actually getting a bigger bang for their buck. Larger homes are selling for less money than they were back in 2007,” says Jablonski. “They’re getting more house for their money ... They’re saying ‘hey it’s a good investment. I can justify spending that kind of money’.”

He too doesn’t see any letdown in the luxury home market heading into 2013.
“The city’s growing. There’s a lot of in-migration still coming to the city. All the economic factors are there for continuing good news,” says Jablonski.
Rachelle Starnes, a realtor with Royal LePage Foothills, says the luxury market has been strong due to a softening of prices and there are no economic factors to suggest the market will be any different in 2013 than in 2012.
“We remain optimistic that we are headed for a bullish luxury real estate market in 2013,” says Starnes.
Tanya Eklund, a realtor with RE/MAX Real Estate Central, says Calgarians have seen wage increases and higher bonus structures in the last year due to profit margins increasing for companies. The city’s population has also increased with more people moving here.
“Low interest rates and lower inventory will continue to create demand,” says Eklund. “Low vacancy rates and rental rates, which are speculated to continue to rise, will help the real estate market as buyers will turn to purchasing instead of renting. Housing starts will be slightly down this year due to developers pulling back due to the amount of new inventory on the market which will also help the resale market.”
mtoneguzzi@calgaryherald.com
Twitter:@MTone123

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