What goes up must come down
Home sales last year in the luxury market fell off the map.
Disappointing especially since 2014 was a banner year when it came to sales of homes over $1 million.
In reviewing the past year, the Calgary Real Estate Board reports that just 511 homes in this high-end category sold in 2015 which was the lowest number of luxury homes to be sold since 2011. In the year previous, 846 homes changed hands.
CREB®’s go-to chief economist, Ann-Marie Lurie, told Calgary media that the numbers for 2015 were no surprise to anyone in the industry. She cites employment figures in high-paying jobs as the bad guy in this luxury sales scenario, noting that any job gains in 2015 were in the construction and business service sectors which typically offer salaries that would not support the purchase of a home in excess of $1 million.
It was more than a decade ago, in 2005, when just 139 homes in Calgary in the luxury category were sold. While a drop of 335 sales from year-to-year is significant in comparison, the numbers still suggest that the luxury market is still viable although not as healthy as in some years.
Experts agree that luxury homes are still a strong component of the Calgary market, but with the current conditions the right marketing and consistent exposure in international markets is very important.
Challenges exist in every segment of the market, not just in luxury homes and buyers are still out looking. They simply have more selection and can get more house for the money now. The weakening Canadian dollar is also a factor in the Calgary home buying market. It’s not exclusively the price of oil and job losses dictating who is buying what home.
Some have pointed to clients from Asia who may be moving from the outrageous prices in Vancouver and Victoria and are turning their attention to Alberta. For these buyers, Calgary offers significant value.
The most expensive home to move in 2015 was located in Britannia in South West Calgary, with a final selling price of $5.2 million. The second and third homes were both $3.769 million and were condos in Mission in inner-city South West Calgary.
Property Tax Update on Luxury Homes
In the first week of January 2016, the City of Calgary mailed tax assessment notices to all property owners. If you are selling your luxury home, the bad news is that your list price may not be as high as you’d hoped. And the value of your home as assessed by the City is also down and has likely dropped fast than the value of other people’s property. But if you’re not selling, the good news is that you most likely will have to pay less property tax come this summer.
Overall, the value of properties as assessed by the City dropped just 1% with some increases balancing out the figures. However, high-value properties dropped dramatically.
Non-residential properties, primarily commercial and office space dropped in value by an average of 12% but retail properties appreciated by 4%.
The City of Calgary bases its annual assessments on what properties were worth in the marketplace as of July 1 of the year before. This date is determined by provincial legislation.
Those wishing to challenge their tax assessments may do so by March 7. There is a $30 filing fee to dispute your assessment.