Photo: Bill Longstaff/Flickr
As Calgary continues its path to economic recovery, homebuyers are slowly returning to its luxury housing market. However, this spring, the city’s top-tier market will be characterized by high inventory, slow absorption and price adjustments.
The city’s luxury condo market is poised to face the most challenging conditions in the coming months, with ample supply and weak demand causing a market imbalance, according to Sotheby’s International Realty Canada’s 2018 Spring Market Forecast, published last week.
During the first two months of 2018, $1 million-plus condo sales rose to nine units compared to two units in the same period a year ago — a relatively small increase compared to detached sales.
“Demand for condominiums is expected to remain soft, even as new inventory enters the spring market,” reads the report.
The report tracks real estate activity for homes priced in the $1 million to $4 million-plus range in Canada’s largest cities during January and February 2018.
Calgary’s $1 million-plus attached market also saw a small uptick in sales during the first two months of 2018 with eight units sold, up from five during the same period in 2017.
Although Calgary’s luxury condo sales got off to a slow start in 2018, activity in the city’s top-tier detached market showed more positive signs.
A total of 77 detached units sold over $1 million during the first two months of 2018, a 33 per cent year-over-year increase.
“Top-tier sales in the first two months of 2018 reflected the recuperation of consumer psychology, an increased willingness of home sellers to adjust pricing to meet market realities, as well as buyers’ readiness to act,” reads the report.
Overall, home sales over $1 million (condos, attached and single-family homes) were up 45 per cent year-over-year to 94 units.
With the help of an improving economy, consumer confidence in Calgary’s luxury market is slated to pick up this spring, despite the lingering effects of the province-wide recession.
“Calgary is expected to see an increase in luxury sales as buyers and sellers emerge from a prolonged stalemate over pricing expectations to re-engage in the current market reality,” says Brad Henderson, President and CEO of Sotheby’s International Realty Canada, in a press release.