The Calgary Luxury Real Estate Market is performing well for the second month in a row. Even though we had a 14.2% increase in inventory, we also had a 10% increase in sales. This gives us a firmer position on the threshold of the balance and buyer’s market.
I dug up this article from May 2015, that talked about our dire situation with the luxury home market. Then there were 600 homes priced over $1 million. Within that month, there were only 65 sales, resulting in nine months of inventory. “The luxury market is pretty quiet.” says Tracy Johnson from CBC News.
In the article, it speaks of two factors that affected the luxury home market: oil prices and the stability of the government. At that time, the oil prices hovered around $60/barrel, and the NDP government just came into office. See article here: http://www.cbc.ca/news/canada/calgary/calgary-real-estate-market-flush-with-luxury-homes-1.3094913
Nearly two years later, we are sitting at $47.66/barrel and two years in with the NDP government.
As for the luxury home market activity, there are 433 properties over $1 million and 77 sales in the month of April. This puts us at 5.62 months of inventory. March was at 5.41. Taking it back a bit further, February was at 9.2 months and January 12.2, indicating positive market growth for luxury homes.
So for the oil prices being lower and the NDP government still in office, why are we seeing a recovery of the luxury home market?
According to Statistics Canada, Alberta has seen year over year growth in the employment in the following sectors: Agriculture(we have amazing barley producers), Transportation and Warehousing, Educational Services, Health Care and Social Assistance, Accommodation and Food Services and (of course) Public Administration.
That said, even though the energy sector is an important component of Alberta’s economy, it’s not the only one.
When looking at the individual communities many of them have performed well. Although I’ve also seen a couple of surprises.
One is in Elbow Park where the inventory has increased by 68.7% while still maintaining decent sales and 6.8 months of inventory. Then there’s Springbank Hill, which has been challenged with high inventory and low sales, and now is experiencing good activity. It’s at an astonishing 2.7 months of inventory
The communities that have performed consistently over the last four months and better than average are communities worth considering for your luxury home purchase. The communities I’m speaking of are Hillhurst, South Calgary, Upper Mount Royal, West Hillhurst, West Springs and Richmond.
The price band that is selling incredibly well is between $1 – 1.2 million, with 2.8 months of inventory (see chart below). This could very well be the reason for improvements in the luxury home market – more conservative choices.
In April there was also a tightening up of the days on market. In March it was a median on 48 days, while in April it was 30 days.
Looking at Price per Square Foot for Detached homes only, there started out to be an upward trend and then dipped down to $459/square foot for April.
The sales for April have shown a gradual increase over the last four months. If the sales continue the pattern of previous years we will see growth up until the end of June before it starts to decline.
See the full report with graphs and charts here:
Please feel free to contact me if you’re looking for information on your area. You can expect these to pop up on my Facebook Inner City YYC Page at the beginning of every month. Take care!