July 23, 2019
Calgary’s luxury market is still slow, according to a recent report by Sotheby’s International Realty Canada.
Despite positive signs for lower priced homes in the city, Sotheby’s found the $1 million-plus market for real estate has not experienced similar momentum in the first half of the year.
“We’ve started to see a lot of activity in the under $500,000 category, particularly in the single-family dwelling,” says Don Kottick, president and chief executive officer of Sotheby’s International Realty Canada. “But when you get to the million-plus market, it’s still a buyers’ market and we’re still seeing an inconsistent performance.”
The 2019 Mid Year End Real Estate Report from Sotheby’s International Realty Canada revealed the luxury market for Canada’s largest cities is bifurcated.
“The big story in this report is that top-tier markets have veered in different directions in the first half of 2019,” he says. “That’s even with the second quarter gains we started to see in the overall housing market.”
The report suggests Toronto, which had experienced a correction of past year, is now “revitalized,” Kottick says. What’s more, Montreal is on pace for another healthy year of growth for its luxury real estate market.
“Then you have the Vancouver market, which is still a buyers’ market,” he adds.
Similarly, Calgary is struggling largely due to the difficulties faced by the province’s leading industry: energy.
Overall sales in the $1 million-plus market in the city fell 21 per cent in the first six months of the year compared with the same period in 2018. In the first half of the year, 275 properties changed hands as opposed to 350 in the first six months the previous year.
The numbers were slightly better in most categories from January to June this year than the last half of 2018, except in the condominium category.
“The condo market is still a little bit vulnerable based on the weakened demand for condominiums, but with the job situation picking up, hopefully, we see things improve going forward.”
Indeed, the economy is looking better, Kottick adds, pointing to a recent report by Calgary Economic Development that forecasts the city’s economy will experience steady growth over the next five years.
Recent job numbers also “are looking positive for all of Alberta, specifically Calgary,” he notes.
To that end, Calgary added 7,500 jobs in May and June, mostly in the energy sector, Statistics Canada data show. Kottick further suggests the latest provincial election and approval of the Trans Mountain Pipeline should bolster sales activity in the coming months.
“There’s the go ahead for the pipeline; the job numbers are looking better, and there is more activity in the market,” he says. “Plus, there’s an (federal) election coming up and depending on how that goes, it could breathe more life into the economy in Calgary.”
In the meantime, he says reasonably priced properties in sought-after areas generally face fewer headwinds.
“Properties are still selling,” Kottick says. “But it largely comes down to buyer and seller expectations.”