Despite devastating spring floods, Calgary is No. 1 when it comes to Canada’s upper-end real estate market.
In the first half of 2013, compared to the last half of 2012, luxury homes sales jumped 67 per cent in Calgary, beating out Vancouver at 65 per cent, Toronto at 61 per cent and Montreal at a lacklustre 26 per cent in the single-home category.
And it’s only going to get better, according to Sotheby’s International Realty Canada. The realtor is forecasting strong performance in the luxury home sector – defined as $1 million and up – heading into the fall.
Sotheby’s says key indicators for a strong Autumn market include strong national and regional economic fundamentals, as well as increased international buyer demand from areas such as China, Russia, the Middle East, India and the United States.
Many international buyers view the conservative fiscal policies of the Canadian government as an attractive factor when it comes to buying real estate in Canada, Sotheby’s said, noting that a number of those buyers also use mortgages as a strategic component of their investment strategy.
Other trends show that luxury attached home sales in all four markets increased even as the average number of days on the market declined. In Calgary, the attached home segment of the market in the $1- million to $2-million-dollar range jumped 217 per cent in the first half of 2013 compared to the last half of 2012.
As well, sales of condos over $1 million were up in all four centres.
In the first half of 2013, Calgary saw 388 sales over $1 million. With resale and rental inventory remaining tight, Calgary is expected to continue to experience strong sales into the fall.
The city’s robust economy is helping drive sales with the estimate that for every 300 square feet of new office space created, an additional person is added to downtown Calgary.
“The high number of executive-level jobs created will continue to fuel demand for top-tier real estate specifically, as newcomers take advantage of the city’s relatively affordable real estate market to ‘buy up,’ ” Sotheby’s said in a release.
Of the 1,239 homes over the $1-million mark sold in Vancouver in the first half of 2013, 955 were single-family dwellings.
Sotheby’s Top Tier Trends study showed that 40 per cent of buyers of luxury home sales originated outside of Canada, with China leading, followed by Iran and the United States.
Luxury homes sales rebound in the East
Toronto sales rebounded from a slow start to the year. Home sales in the highest end of the market showed the best results, with the sales of houses priced over $4 million jumping 124 per cent compared to the last half of 2012. In that market segment, 38 homes were sold.
Montreal’s 206 sales of homes over $1 million represented a 26 per cent increase over the last half of 2012, but a nine per cent decrease when compared to the first half of 2012. Sotheby’s said that the city’s political climate had had a dampening effect on the high-end real estate market.
However, Montreal is expected to continue to lead the country in luxury real estate sales to international buyers. Some 50-60 per cent of high-end homes currently are sold to foreign purchasers and Sotheby’s suggested those numbers will increase with strengthening demand from the Middle East and Asia.
According to the report: “The international influence on the market for investment-friendly condos is also notable: foreign purchasers have been buying multiple units of 600-square-foot condos in several new downtown developments, a recent and promising trend for the market.”
Ross McCredie, Sotheby’s president and CEO, remains confident.
“In examining the performance of the high-end market, we feel confident that Canada’s largest urban centres remain in exceptional positions heading into fall, with healthy market fundamentals from coast to coast,” he said in a release.
Sotheby’s Top-Tier Real Estate Report analyzes one year data for key market variables over a six-month time frame for Vancouver, Calgary, Toronto and Montreal. The data includes sales volume, average days on the market, and percentage of homes sold over asking price for condominiums, attached homes, and single-family homes sold for $1-2 million, $2-4 million and over $4-million on MLS.