The easing of Calgary housing prices in the first half of 2019 brought some purchasers back into the market but the luxury category continues to struggle, according to a new report released Wednesday by Sotheby’s International Realty Canada.
The report said Calgary’s real estate market was driven by renewed activity in the market for homes under $500,000.
“However, recovery in the top-tier real estate market continues to lag, with a long-anticipated rebound still elusive in the first half of 2019,” said the report.
“Overall sales of $1 million-plus residential real estate (condominiums, attached and single family homes) declined 21 per cent in the first six months of 2019, with 275 properties sold. There was one transaction over $4 million in the first half of 2019, up from the same period last year.
“Single family home sales over $1 million fell 20 per cent to 243 homes sold in the first six months of the year; of these, seven, or three per cent, were sold over asking price, reflecting market realities that require sellers to price homes appropriately to complete a sale. One single family home sold over $4 million in the first half of 2019, up from zero sold above this threshold in the first half of 2018. Twenty-six attached homes sold over $1 million in the first six months of the year, a 10 per cent year-over-year decline.
“As heightened downtown office vacancy rates, lower downtown employment, and the proliferation of top-tier housing alternatives continued to weigh on demand, Calgary’s luxury condominium market remained quiet in the first half of 2019. Sales over $1 million fell 65 per cent to six condominiums sold.”
In the first half of 2019, residential real estate over $1 million sales (condominiums, attached and single family homes) in Canada’s largest real estate market, Toronto, renewed with a 12 per cent increase from 2018 levels, said Sotheby’s.
It said sales of City of Montreal real estate over $1 million in the first half of 2019 reflected a vibrant, expanding luxury market. The city surpassed other Canadian major metropolitan real estate markets in year-over-year percentage gains in top-tier condo sales and is on track to follow record-setting gains in 2017 through 2018 with another banner year. Residential real estate sales over $1 million (condominiums, attached and single family homes) increased five per cent in the first half of 2019, while sales over $4 million were up 267 per cent year-over-year.
“The market for real estate over $1 million decelerated in the City of Vancouver in the first half of 2019 as the market continued to bear the burden of tightened mortgage rules, multiple governmental policies and taxes, hesitant sellers and fickle buyers lacking motivation to commit to transactions. According to Sotheby’s International Realty Canada experts, the disparity between purchaser and seller pricing expectations continued to reconcile over the first half of the year. While an uptick in home buyer interest and open house activity did not translate into consistent gains in the first quarter, by mid-year, quality properties priced for 2019 buyers’ market conditions were drawing bids, and in occasional instances, bidding wars. Overall, $1-million-plus real estate sales (condominiums, attached and single family homes) fell 33 per cent from 2018 levels, while $4 million-plus luxury sales declined 34 per cent,” explained the report.
Don Kottick, president and CEO of Sotheby’s International Realty Canada, said Eastern Canada’s two key metropolitan areas continued to lead Canadian top-tier real estate performance in the first half of 2019.
“Toronto’s revitalized top-tier market reflected renewal in consumer psychology now that the impact of recent policy and mortgage lending changes have been assimilated, as well as broader renewal of confidence in the nation’s economic performance,” he said.
“Over the past few years, Montreal has also emerged as one of Canada’s most vibrant luxury real estate markets due to its strengthening economic fundamentals. In the first half of this year, it was the city’s condominum market that surpassed expectations with year-over-year percentage sales gains that outstripped other major cities’ performance.”
Kottick said recent price declines in Vancouver and Calgary have created opportune conditions for prospective high-end home buyers to enter the market, upgrade their homes, and to access property types and neighbourhoods that may have been previously out of reach.