Calgary luxury home sales set another record in December
Calgary’s luxury home sector continued to soar in December, setting another record in the resale MLS market, despite the recent collapse in energy prices.
According to Mike Fotiou, associate broker with First Place Realty, there were 40 MLS sales of over $1 million in Calgary as of December 28, eclipsing the previous December record of 39, established in 2012.
In 2014, every month set a new sales record for luxury home sales and June hit the all-time high of 104 transactions.
Fotiou’s data indicates that there have been 852 luxury home sales year-to-date as of December 28, up 17 per cent from the 2013 year-end total of 726, which was the previous annual record.
“The market for luxury homes has been so strong in Calgary in 2014 due to the lack of inventory of quality product therefore increasing demand, expansion of the energy sector into Calgary from other cities, and average prices of homes moving into the category of luxury homes. Average is now the new luxury,” said Rachelle Starnes, realtor with Royal LePage Foothills in Calgary. “The cost to build a new home in 2014 has escalated as well with many of the luxury builders being overloaded with renovations from the floods and the average length of time to move from conception to completion of a new home being between 18 months and 24 months.
“Our team feels this is one of the largest contributing factors to the record in sales for luxury homes whereby buyers are making the decision to buy versus build due to the cost of building far exceeding the value to purchase a resale luxury home that is move-in ready. The volatility of the market has also been incredible for the buyers in the luxury home market. The more volatile the market, the more money is made every day on day trading. The saying goes the rich get richer and we have seen a stable luxury market for over five years now with the changes in the economy virtually having very little impact on sales.”
According to the Calgary Real Estate Board, luxury home sales have been on an upward swing in the past few years. The number of sales in that market for each year: 2005, 138; 2006, 334; 2007, 458; 2008, 369; 2009, 337; 2010, 365; 2011, 446; 2012, 544; and 2013, 726.
“Calgary’s strong luxury real estate market this past year has primarily been driven by long-term confidence in our local economy and stability in our market. With low interest rates and net migration still positive contributing factors, Calgary’s luxury market also benefited from a more balanced market this year. Even in December, a typically slower month in real estate, we continue to receive interest from qualified buyers in several of our high-end listings,” said Corinne Poffenroth and Wynn Alex Carr, realtors with Sotheby’s International Realty Canada, in a statement.
Ann-Marie Lurie, chief economist with CREB, said one of the reasons for the hike in sales in that sector is that overall housing price increases have pushed more homes into the luxury market category.
“It really is consistent with what we have seen over the past years. It represents a larger share of the market,” said Lurie.
“There’s also been improved listings in this area . . . This year it’s kind of showing just under four per cent of the market, that million-plus sector. So it is a shift up. Part of that has been due to the price increases. It’s also been due to the fact that we had fairly strong economic activity over the past several years. So we had strong net migration. We had employment growth. We had wage gains. All that contributed to that rise.”
The question mark is how the luxury market will respond in 2015, considering the recent dip in oil prices and the forecast slow down in the city’s economy next year.
mtoneguzzi@calgaryherald.com
According to Mike Fotiou, associate broker with First Place Realty, there were 40 MLS sales of over $1 million in Calgary as of December 28, eclipsing the previous December record of 39, established in 2012.
In 2014, every month set a new sales record for luxury home sales and June hit the all-time high of 104 transactions.
Fotiou’s data indicates that there have been 852 luxury home sales year-to-date as of December 28, up 17 per cent from the 2013 year-end total of 726, which was the previous annual record.
“The market for luxury homes has been so strong in Calgary in 2014 due to the lack of inventory of quality product therefore increasing demand, expansion of the energy sector into Calgary from other cities, and average prices of homes moving into the category of luxury homes. Average is now the new luxury,” said Rachelle Starnes, realtor with Royal LePage Foothills in Calgary. “The cost to build a new home in 2014 has escalated as well with many of the luxury builders being overloaded with renovations from the floods and the average length of time to move from conception to completion of a new home being between 18 months and 24 months.
“Our team feels this is one of the largest contributing factors to the record in sales for luxury homes whereby buyers are making the decision to buy versus build due to the cost of building far exceeding the value to purchase a resale luxury home that is move-in ready. The volatility of the market has also been incredible for the buyers in the luxury home market. The more volatile the market, the more money is made every day on day trading. The saying goes the rich get richer and we have seen a stable luxury market for over five years now with the changes in the economy virtually having very little impact on sales.”
According to the Calgary Real Estate Board, luxury home sales have been on an upward swing in the past few years. The number of sales in that market for each year: 2005, 138; 2006, 334; 2007, 458; 2008, 369; 2009, 337; 2010, 365; 2011, 446; 2012, 544; and 2013, 726.
“Calgary’s strong luxury real estate market this past year has primarily been driven by long-term confidence in our local economy and stability in our market. With low interest rates and net migration still positive contributing factors, Calgary’s luxury market also benefited from a more balanced market this year. Even in December, a typically slower month in real estate, we continue to receive interest from qualified buyers in several of our high-end listings,” said Corinne Poffenroth and Wynn Alex Carr, realtors with Sotheby’s International Realty Canada, in a statement.
Ann-Marie Lurie, chief economist with CREB, said one of the reasons for the hike in sales in that sector is that overall housing price increases have pushed more homes into the luxury market category.
“It really is consistent with what we have seen over the past years. It represents a larger share of the market,” said Lurie.
“There’s also been improved listings in this area . . . This year it’s kind of showing just under four per cent of the market, that million-plus sector. So it is a shift up. Part of that has been due to the price increases. It’s also been due to the fact that we had fairly strong economic activity over the past several years. So we had strong net migration. We had employment growth. We had wage gains. All that contributed to that rise.”
The question mark is how the luxury market will respond in 2015, considering the recent dip in oil prices and the forecast slow down in the city’s economy next year.
mtoneguzzi@calgaryherald.com
