Calgary’s high-end home market continues to show positive signs
by Devon Babin
The real estate market in Calgary has seen its ups and downs since the end of 2009 but one segment of the market continues to perform well. While home sales were very encouraging at the start of the year, numbers dropped off for the summer months. In June the city saw a 16 per cent decrease in single-home sales versus the previous month. At the opposite end of the spectrum is the luxury home market that has shown signs of strength throughout the year, including the summer months which can be slower, especially for builders.
According to stats released by the Calgary Real Estate Board (CREB), “sales of million-dollar-plus properties jumped by nearly 42 per cent year-to-date until the end of June, compared with the same period a year ago.”
The Canada Mortgage and Housing Corporation (CMHC) also supports that view, with numbers showing strong growth in the luxury market.
“We are seeing a higher proportion of homes sold in the higher price points compared to 2009,” says Richard Cho, senior market analyst with CMHC’s Prairie and Territories Market Analysis Centre. “In the first six months of 2010, nearly three per cent of single-detached homes sold have been priced over $1,000,000. In comparison to 2009, it was under two per cent.”
This trend has continued into the fall, which could prove to be a big season for luxury homes, especially in new construction. Justin Mauro, marketing manager for Albi Homes, says his company saw steady numbers throughout the summer months, and everything is pointing to trends continuing into the fall. With kids back in school and people returning from vacations, the fall months are often a busy time for homebuilders.
“Our organization has two different markets to judge by – Astoria Homes being our custom division and Carpenter Homes being our mid-market division. We have seen a decrease in traffic and sales at the mid-level and a constant flow in the higher custom end. We always seem to build our 15-20 custom homes year after year and don’t see a change in 2010,” says Darrell Haase, president of Astoria Homes. “If you have a combination of quality, design, service and location there seems to be no shortage of customers. Astoria Homes is certainly not trying to take on the world; we like our niche of 15-20 homes per year. We set that goal when we started building in 2001 and maintain the philosophy that instead of building a large volume of homes, let’s stick to a small number and do a fantastic job.”
Part of the success of the luxury market and the new homes being constructed in the $1 million-plus range is the demographic looking for new high-end homes.
“The buyer tends to be over 40 and still has some substantial equity in their homes,” says Mauro. “They want what they want and they often can’t find it in the resale market.”
And what customers are looking for this year is the latest technology.
“Automation, theatres, lighting systems and audio video in general are a huge part of custom homes,” says Haase. “The demand is so great for the newest technology that we have installed some state-of-the-art equipment in our new show home in Willow Creek. Customers still like the large open rooms designed not only for entertaining but also for their lifestyle. Gourmet kitchen, spa-like baths, theatre rooms and wine rooms are a few of the must-haves. Of course the location and views from all rooms must be spectacular as these buyers enjoy the outdoors as much as the indoors.”
On the operations side of the newly built luxury home market, the trends have changed slightly since the end of 2009. In a big turnaround from 12 months ago, free upgrades and other incentives are not being offered nearly at the level they once were.
Click here for part 2 of the article
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