Luxury buyers want it all including the (second) kitchen sink
Today’s homebuyers want more for less – a pattern that is also starting to manifest in the luxury market, say local industry experts.
“There’s no question that, like everybody, we’ve felt the pinch,” said Danny Raposo, general manager of Astoria Custom Homes, which is building in Watermark at Bearspaw, just outside the city limits.
Still, Raposo describes 2016 as “a decent year,” noting an increased interest in Astoria’s Watermark product during the eight weeks prior to mid-September.
“People are looking for added value,” he said. “People who have money are looking now at this being a good opportunity with the market the way it is.”
Instead of throwing everything including the (second) kitchen sink into a home, buyers are looking for strong service and come armed with questions, added Raposo.
“If you’re selling at this price point, what do we really get for that?” he said. “And they’re comparing with our competitors. They’re looking at where to get the best value in terms of the specs included.”
Raposo has also noted, “a lot younger demographic than I would have anticipated” has been looking at Astoria’s homes in Watermark.
“People who have worked hard and earned their keep and maybe are moving from places like Tuscany Estates and Royal Oak.”
“Lots of young professionals, young families the 40-to-55-age range. People who have worked hard and earned their keep and maybe are moving from places like Tuscany Estates and Royal Oak,” he said.
Canada Mortgage and Housing Corp. principal analyst Richard Cho said he’s definitely noticed inventory level increases in the regional housing market’s million-plus segment – particularly with new builds.
“There’s a bit more supply on the new home side of things,” he said, noting the current economic downturn is hanging on longer than 2008-09. “In the last downturn, things rebounded more quickly than what we’ve seen today. We’re seeing some pronounced job loss, a slowdown in migration and an increase in [housing] supply levels.”
Combined with a raw unemployment rate in August of 9.5 per cent, it “means attracting people [to Calgary] is not as attractive in terms of other regions, and that includes higher-paid industries like oil and gas,” added Cho.
He noted the average home price in Calgary year-to-date in August was $462,083. Data from Teranet and the National Bank of Canada’s House Price Index, which tracks single-family home prices showed a 1.53 per cent decline year to date and a 4.48 per cent decline year over year compared to 2015.
Canadian Home Builders’ Association-UDI Calgary Region CEO Guy Huntingford said he doesn’t see any signs of the industry “resetting” the definition of luxury – although he agrees with Raposo that buyers in the downturn are seeking more value.
“I think the marketing of luxury homes is really focused on what the market is interested in and that changes year to year,” he added. “And I think the dollar-value bar is irrelevant. Just ask someone in Toronto or Vancouver what $1 million buys.”