Luxury home market stabilizing, but by no means recovered in Calgary: report

Calgary’s luxury home market is showing signs of stabilization, according to a new report from Canadian real estate company Royal LePage.

During the 12-month period ending Jan. 31, 2019, overall sales of luxury houses in Calgary increased 10.3 per cent from the year before, while the median price of a luxury house in Calgary increased 3.2 per cent to $2,012,676 year-over-year.

Royal LePage is predicting luxury home prices in Calgary to continue to trend upwards in 2019, by 1.3 per cent year-over-year. This modest price appreciation comes after years of sustained low prices for high-end homes, a trend that began in 2015 with the downturn in global oil prices.

But while the luxury market appears to be finding its footing, it has by no means recovered to pre-recession levels, said John Hripko, associate broker with Royal LePage Benchmark.

“Yes, it’s stabilized, but they (luxury homeowners) took a massively bigger hit than the rest of the marketplace,” Hripko said. “The luxury market took a beating almost instantly in 2015, so if a home was worth $5 million, it was probably selling at $3.5 million. And it may still be selling at that same $3.5 million today.”

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Hripko added while the number of transactions in the luxury category is picking up, the types of homes involved in those sales tend to be less opulent than what was selling in 2014.

“We haven’t sold as many massive houses, the ones in the $6, $8, $10 million range,” he said.

The modest uptick in the luxury market is occurring at a time when the rest of the Calgary real estate market is in decline. According to the Calgary Real Estate Board, the benchmark price for a detached home in Calgary declined 1.2 per cent year-over-year in 2018. It hit a low of $481,800 in December 2018, down from $521,600 in October 2014.

CREB is expecting Calgary home prices to fall by an average of 2.3 per cent over the course of the year.

astephenson@postmedia.com

Twitter.com/AmandaMsteph

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