Luxury Market Humming Along

With the news coming down from the Canadian Real Estate Association (CREA) that Alberta’s real estate industry is expected to be one of the country’s few standouts for growth in 2013, it should come as no surprise that homes in Calgary’s luxury market continue to be a hot commodity.

According to CREB®, there were 56 sales of homes priced at $1 million or more in August. While the number represents only a slight increase from the 54 homes sold in the same price range last August, the rise in sales comes after Canada’s stricter mortgage rules came into affect.

The news is even more encouraging when compared to last year’s luxury sales. Between January and August of 2012, 542 homes priced upwards of $1 million were sold in Calgary, representing a 14 per cent increase from the 476 homes sold during the same period in 2011.

In June, Sotheby’s International Realty released a report on trends in Canada’s “top-tier” real estate market. In the report, sales and listings of Calgary homes priced at $1 million or more both showed dramatic increases over previous quarters. The percentage of luxury homes being sold for more than the asking price was six per cent, while the average time houses in the category spent on the market was 53 days – both relatively unchanged from the previous quarter.

When looking for reasons behind the continued growth in the number of luxury residences being snapped up in the city, Alberta’s rather rosy employment picture is a good indicator. According to the Organization for Economic Cooperation and Development (OECD), which tracks and reports the unemployment rate among the advanced, wealthy countries of the world, Spain, Greece and Portugal have the highest current unemployment rates in the world at 24.6, 21.9 and 15.2 per cent, respectively. On the other hand, if Alberta were ranked separately as an OECD country, it would be the fourth best place in the industrialized world in which to be looking for work.

Helping to explain why so many Calgarians are able to afford such opulent addresses is the average income in the province. When Albertans go to work, they’re making more on average than nearly anyone else in the country. According to Statistics Canada, the median family income (before taxes) in Calgary was $89, 490 in 2010 – up from $60,800 ten years ago and second only behind Ottawa-Gatineau in the country among major cities – and far outpaced the national median family income of $69,860.

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