Calgary luxury homes hold their own

Posted by on Saturday, August 13th, 2016 at 2:30pm.

The mid-year shake down by the Calgary Real Estate Board shows that higher-priced properties in our city seem to have some staying power.

While the number of sales of residential properties priced at over $1 million is up in the first six months of 2016, from 347 the first six months of last year to 371 this year, those 24 additional transactions seem like a huge deal all things considered.

One would think that with layoffs happening every month and potential home sellers taking a wait-and-see approach, that if any type of property would be suffering the most, it would be the high-end big-ticket properties. 

Yes, home and condos – resale and new - priced in the millions are doing well.

Why is this happening?

CREB®’s chief economist attributes this surprising stat to savvy sellers adjusting prices to better attract luxury buyers.  Ann-Marie Lurie said price decreases on many of Calgary’s cushy properties have helped to convince luxury buyers that they’re getting amazing value.

Seeing million dollar properties moving these past six months is keeping that light at the end of the tunnel shining.  While CREB® has predicted more of the same for the balance of the year – softer demand and declining prices, the worst in terms of the overall economy may have leveled out.

Todd Hirsch, chief economist with ATB Financial, says transactions in new construction in the $1 million-plus category is something that will fuel what he believes to be growing optimism in our city.  Adjusted pricing is motivating those buyers interested in the luxury market to take action because they wonder if prices really will drop any more than they already have.  Luxury home buyers generally believe that now is the time to buy.

New home sales

Luxury properties in the new construction sector are also moving. Chris Richer of Albi Homes, now absorbed by Brookfield Residential, called the sector “resilient” and isn’t afraid to put it out there that his company’s strong performance over the last four or five months is indicative of an increase in consumer confidence.  Richer says high-end products in Auburn Bay in Calgary’ South East and Aspen in the West is where things have bounced back somewhat, and that as a whole, Albi has not felt any immediate need to drastically alter prices.   He refers to some strength in the “move-down” segment, meaning older buyers in luxury properties looking to right-size while staying in a home that’s more in line with the premium amenities they are accustomed to.  Richer refers to them as serious buyers and has noted that there are fewer tire-kickers or window shoppers visiting show homes.

Meanwhile, back at the ranch…

Calgary overall, all market sectors included, has seen a decline in bench mark prices so CREB® has offered a prediction for the second half of 2016.  It believes benchmark prices, which have already fallen nearly 5%, will decline further 3.8% and sales volume this year will fall by 8%.  CREB analysts have admitted that the economic downtown in our city is worse than initially thought with higher unemployment figures and more people leaving town than was predicted.  

 

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