Definitive buyer’s market conditions are expected for the City of Calgary’s top-tier real estate market this spring as the provincial economy confronts the monumental challenges of falling oil prices and the COVID-19 crisis, says a new report released Wednesday by Sotheby’s International Realty Canada.
While overall residential sales were up 23 per cent year-over-year in February, activity in the top-tier market was subdued in the preliminary months of 2020, reflecting rising consumer anxiety in face of ongoing economic challenges, said the report.
The overall benchmark price contracted one per cent year-over-year to $416,900 in February.
“Sales of $1 million-plus residential real estate (condominiums, attached homes, and single family homes) contracted eight per cent in the first two months of 2020 to 57 properties sold compared to 62 units sold during the same period in 2019. Of these, 50 properties sold between $1–2 million, down two per cent from 51 units sold in January and February of 2019, while seven units sold between $2–4 million, a 30 per cent decline from 10 units sold in the previous year. There were no transactions over $4 million compared to one unit sold in the first two months of 2019,” said Sotheby’s.
“In the first 15 days of March, sales over $1 million were up a marginal five per cent to 22 units sold year-over-year. It is expected that Calgary’s top-tier condominium market will continue to see challenges into the spring as oversupply remains the narrative.”
The majority of top-tier activity was seen in the single family home market, with sales in this segment comprising over 90 per cent of Calgary’s overall top-tier market activity in the first two months of the year, said the report.
Single family home sales over $1 million remained stable from 2019 levels, with 52 homes sold in the first two months of 2020 and the same period the year prior. There were no transactions over $4 million in the first two months of the year, or the first half of March, it said
“Prior to the drop in oil prices and the onset of COVID-19, the conventional and top-tier real estate market was expected to stabilize in 2020 given favourable mortgage lending conditions and retreating levels of inventory. This spring, Calgary is vulnerable to challenging and unforeseen macro-economic forces that will further delay the city’s recovery. For prospective home sellers, strategic pricing and comprehensive marketing will be a requirement for maximizing the potential of a property sale,” added the report.