Following a fragile market in 2018, the prospect for recovery in the City of Calgary’s $1 million-plus real estate market was tenuous in 2019, according to a report released Wednesday by Sotheby’s International Realty Canada.
It said recovery in Calgary’s top-tier real estate market remained elusive in 2019 as activity and housing prices trended downward throughout the year.
Residential real estate sales over $1 million (condominiums, attached and single family homes) decreased 13 per cent to 531 units sold in 2019, said the report.
“Single family home sales comprised the vast majority of $1 million-plus residential sales volume in Calgary in 2019, at 90 per cent. However, consumer demand within this market-dominant segment continued to waver. $1 million-plus single family home sales saw a 12 per cent decrease in activity with 477 homes sold in 2019. Following an uptick in $1 million-plus condominium sales activity in 2018, Calgary’s top-tier condominium market waned in 2019. Sales over $1 million experienced a 45 per cent year-over-year decline to 16 units sold as the market remained heavily favourable to prospective buyers and investors,” said Sotheby’s
“Sales of attached homes over $1 million also declined 12 per cent, with 38 homes sold in 2019. Despite this annual decline, overall residential real estate sales over $1 million stabilized in the latter half of 2019, dipping two per cent from the same period in 2018 to 256 properties sold.”
The report said a challenging market prevailed as weakness in the energy and agriculture sectors permeated the local economy. Economic and political anxiety built up in the months leading up to a contentious federal election in October 2019 and remained elevated in the months that followed. Consumer confidence also faltered following the end-of-year release of a provincial budget that aims to reduce expenditures by $1.3 billion from the previous year’s spending levels, it said.
“In spite of these compounding challenges, Calgary’s overall real estate sales activity experienced an uptick in the fall, driven largely by improvements in the market for housing under $500,000. However, the city remained oversupplied with top-tier inventory,” said the Sotheby’s report.
“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. 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.”
Mario Toneguzzi is a business reporter in Calgary.
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