Overall sales on Calgary’s MLS System in 2019 decreased 1.38 percent from 2018, but the story was different in the top-tier market of homes priced at $1 million or more.
“The City of Calgary’s top-tier market faltered with building economic and political anxiety leading up to and following the provincial and federal elections,” says Don Kottick, president and CEO of Sotheby’s International Realty Canada. “Residential real estate sales of condominiums, attached and single-family homes over $1 million decreased 13 percent from 2018 levels overall.”
The decline from 2018 is significant, given the market was fragile then, says Kottick, adding improved numbers last year were not expected.
“The prospect for recovery in the City of Calgary’s $1-million-plus real estate market was tenuous in 2019,” he says. “A challenging market prevailed as weakness in the energy and agriculture sectors permeated the local economy. As Alberta’s growth forecast slowed, Calgary’s real GDP contracted 0.4 percent and the unemployment rate hit 6.9 percent, well above the national rate. The city remained oversupplied with top-tier inventory and as a result, activity and prices trended downward throughout the year.”
There was a glimmer of hope in the last half of 2019, as sales dipped a milder two percent from the same time period in 2018.
The Calgary Real Estate Board reports 613 $1-million-plus homes exchanged hands in 2018, compared to 527 in 2019. In December 2018, 21 homes in the category were sold, compared to 29 in December 2019.
“As in 2018, two homes were sold over $4 million on Multiple Listing Service in 2019, reflecting soft demand in the city’s ultra-luxury market,” says Kottick. “However, Sotheby’s International Realty Canada’s sale of a prestigious estate in December 2019 at a price that was the highest for a detached home in Calgary since January 2015 reflected the persistence of demand for the city’s premier real estate, so long as strategic pricing, targeted marketing and comprehensive exposure aligned.”
The glimmer is not expected to get much brighter this year.
“Little relief is expected for Calgary’s top-tier market leading into 2020 given persistently weak oil prices, inconsistent consumer confidence and incremental projected GDP gains,” says Kottick. “With a challenging environment anticipated well into 2020, comprehensive local and international marketing programs, as well as non-traditional sales models such as the use of exclusive auction partners, will remain imperative to selling luxury homes in the region.”
Copyright Postmedia Network Inc., 2020
