A new report on Calgary’s luxury offerings is providing additional support for the argument the city’s housing market is growing at a more steady and sustainable rate than other markets across the country.
Although multiple sources have singled out the housing markets in Toronto and Vancouver as proof of a greater Canada-wide trend, Calgary has yet to see the sort of rapid price fluctuations and sales declines evident in those cities.
Released by Sotheby’s International Realty, the Top-Tier Real Estate Report examined the number of million dollar-plus residential properties sold from January to June 2011 and 2012 in Calgary, Vancouver, Toronto and Montreal. The report compares the sales volume, number of days on market, inventory of listings and percentage of homes sold over the asking price.
According to the report, Calgary showed a 19 per cent increase in the million dollar-plus sales category in the first half of 2012 compared to the first half of 2011 (January to June). Along with increased sales volume, Calgary also saw a dramatic spike in the volume of properties listed in excess of $1 million. 2012 inventory in Calgary showed an increase of 92 per cent over the same timeframe last year, with listing numbers jumping from 474 homes listed for sale at $1 millionplus to 908 homes.
“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 full time well paying positions, 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, which has helped boost sales activity.”
Compare Calgary’s figures to Vancouver’s luxury market where, despite an 11 per cent rise in million dollar-plus listings, sales in the category dropped by 35 per cent during the first half of 2011, falling from 1,996 to 1,291. According to the Canadian Real Estate Association (CREA) sales in Vancouver across all price ranges dropped by 28 per cent in June.
When viewed on a national scale, the impact of that decline becomes even more apparent, as according to CREA average home prices fell by 0.8 per cent on a year-over-year basis in June. However, if the Vancouver market is excluded from the national sales picture, resale prices actually rose by 3.2 per cent.
Occupying the other end of scale from Vancouver’s slowing sales and price declines is Toronto, where the market – or at least prices – continueto soar. According to Sotheby’s, the Greater Toronto Area (GTA) reported a 29 per cent increase in sales during the first half of 2012, generating 3,113 transactions of million dollar-plus properties, compared to 2,405 in the first half of 2011. The inventory of listings in the GTA also rose 31 per cent from 6,193 homes listed over the $1 million price point to 8,105 listings.
The price escalations in Toronto haven’t been confined to the luxury market. Over the last year, house prices in Toronto have risen significantly – a factor that has begun to show in the form of sales declines. According to CREA, sales in the city have fallen off, declining by 2.3 per cent in June and 7.9 per cent year-over-year.
“Big regional divergences persist,” said Douglas Porter, deputy chief economist, BMO Economics. “Toronto prices are up 6.8 per cent year-over-year, while Vancouver’s 13.3 per cent slide is the only double-digit drop in Canada (with the latter again due to the sales mix-weighted prices are still up a touch in that city). More broadly, B.C. has become a buyers’ market with the sales-to-new listings ratio well below normal levels. Calgary is arguably the strongest market, with sales up 16.7 per cent in the past year, one of only three markets reporting double-digit sales gains.”
Despite some of the strongest sales growth in the country, house prices in Calgary have held relatively firm. While year-to-date sales in Calgary have jumped by 19.4 per cent in 2012, prices have risen by just 1.8 per cent.
“Unlike Vancouver and Toronto, the overall price of homes in Calgary have been slow to recover,” said Lurie. “However, as of late we have seen some positive price momentum, which aligns with economic growth occurring in the city.”