While the overall real estate market in Calgary, Alberta has been more or less stagnant throughout 2016, the luxury market has been driving the overall market for the last six months of 2016. The luxury market has been showing signs of recovery throughout the year with foreign investment playing a huge role in the rise of the market. Numerous premium real estate agents have stated that Chinese buyers have been making the greatest number of inquiries with regards to luxury properties.
How have sales been?
In the first six months of 2016, almost 10% more homes changed hands than the corresponding number last year. This was the case for homes worth between $1-2 million. There were 289 such sales and the 29 sales were made in the $2-4 million range. There were no reports of any sale over $4 million. This was significant as the market had dipped by 40% in 2014 and 2015 due to the state of the city's energy sector.
As of the month of November, 2016, the sales of luxury properties have increased the overall base price of a home in Calgary due to the significant amount of sales. The average price of a home is now around $457,000 and the luxury market is responsible for at least 5-10% of this increment in price. The price adjustments in Calgary's real estate market have enabled buyers to take advantage this year.
What is the forecast for 2017?
The luxury market is expected to remain stable for the first six months of the new year. We can expect to see an increase in the sales of $1-2 million properties, but we are unlikely to see significant movement for higher priced homes. However, as buyers have become more positive and foreign buyers continue to pour in, this could significantly change. The luxury market is unlikely to keep the average price of a single-family home, and we can expect a slight decrease in the first few months of 2017. However, sellers may adopt a tougher strategy in the new year as the luxury market has become buyer friendly.