Increased Affordability Equals Accessible Luxury

While affordable and luxury may not be the most closely connected words when it comes to purchasing a new home, the news that Calgary once again ranked as one of the most affordable markets in the country still has plenty of positive ramifications for high-end homebuyers and sellers.

Evidenced by the near-record pace at which properties over $1 million were snapped up in January, the news that Calgary homes – luxury and otherwise – offer good value shouldn't come as a surprise. According to CREB®, there were 34 MLS sales in Calgary of properties over $1 million in January — just missing the January record of 36 luxury sales in 2007. Those numbers follow a year that saw Calgary surpass the all-time record for luxury home sales, with 544 homes priced at $1 million or more sold in the city in 2012, topping the previous record of 458 in 2007. In addition to the growing number of sales, the number of luxury homes on the market also increased in the latter half of 2012, with listings in the category rising 38 per cent over the previous year.

"The improvement in the luxury home market is a reflection of the confidence in the long-term prospects in our city," said CREB® economist Ann-Marie Lurie. "We have recorded significant employment growth in well paying, full-time positions in 2012, and with that there is a growing segment of consumers demand for luxury homes. The recent improvement in luxury home selection has provided these consumers more choice and they are typically getting more home than they did during 2007, the last record year for luxury sales. These factors have helped boost sales activity in this sector."

In a report released by Sotheby's International Realty Canada, Calgary ranked as one of the top markets nationwide for luxury homes, with sales gains far outpacing those other markets included.

"With a healthy economy and a new and effective city council, momentum in Calgary's real estate market continued into the last half of 2012, especially in the high end," stated the report. "High-end neighborhoods like Elbow Park and Glencoe were among those to see strong demand."

Toronto and Vancouver, previously hot spots for luxury sales in Canada, fared worse than Calgary in the report. According to Sotheby's, from July to December 2012, Vancouver luxury sales dropped 31 per cent from the previous year, while in Toronto, sales transactions topped 1,787 million dollar plus properties, compared to 1,921 in the same period in 2011.

The bi-annual report examined the number of million dollar-plus residential properties sold from Jan. 1, 2011 to Dec. 31, 2012. The report also highlights new data for the second half of 2012 (July 1 to Dec. 31, 2012) in Vancouver, Calgary, Toronto and Montreal. The report compared the sales volume, number of days on market, inventory of listings and percentage of homes sold over the asking price.

Tagged: Calgary Real Estate | Calgary Real Estate News | CREB® Chief Economist Ann-Marie Lurie