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Globe & Mail: Panic hits Calgary’s luxury real estate as oil takes its toll
Published Wednesday, Feb. 04 2015, 6:18 PM EST
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Calgary’s housing market took a sharp downturn last month, with sales plummeting 35 per cent compared with the same time last year, while new listings surged 40 per cent. The number of homes on the market across the city jumped from 3,100 to 4,400 in the span of three weeks, Mr. Keeper says. Average prices, however, have stayed largely flat compared to December and realtors say it will likely take several months of rising listings and sinking sales before sellers acknowledge their homes aren’t worth what they were just a few months ago.
It’s a different story for the city’s luxury market, which is already in the midst of meltdown, with some sellers slashing their prices by hundreds of thousands of dollars in a desperate bid to appeal to nervous buyers. Sales of homes above $1-million fell 43 per cent in January compared with a year earlier, the Calgary Real Estate Board said. There were no sales above $1.75-million last month, compared to 10 sales last January, even though there were nearly 300 homes for sales in the price range.
It’s a dramatic reversal of fortunes for the city’s luxury housing market, which broke new records for prices and sales last year. More than 850 homes sold for above $1-million last year, up 16 per cent from a year earlier, according to Sotheby’s International Realty Canada. Much of that growth came toward the end of the year, with sales soaring even as oil prices began their downward slide. But luxury buyers rang in the new year with a sense of panic as major oil producers began slashing jobs and scaling back spending on new projects.
Nearly half of the luxury properties in Calgary’s most prestigious neighbourhood, Mount Royal, have dropped their prices by $100,000 or more, with many homes that were selling well above $1-million now languishing on the market in the six figures. The average detached house in the neighbourhood sold for more than $2.6-million last year, but the neighbourhood hasn’t seen any sales since before oil prices began plummeting in November.
...
Calgary’s housing market took a sharp downturn last month, with sales plummeting 35 per cent compared with the same time last year, while new listings surged 40 per cent. The number of homes on the market across the city jumped from 3,100 to 4,400 in the span of three weeks, Mr. Keeper says. Average prices, however, have stayed largely flat compared to December and realtors say it will likely take several months of rising listings and sinking sales before sellers acknowledge their homes aren’t worth what they were just a few months ago.
It’s a different story for the city’s luxury market, which is already in the midst of meltdown, with some sellers slashing their prices by hundreds of thousands of dollars in a desperate bid to appeal to nervous buyers. Sales of homes above $1-million fell 43 per cent in January compared with a year earlier, the Calgary Real Estate Board said. There were no sales above $1.75-million last month, compared to 10 sales last January, even though there were nearly 300 homes for sales in the price range.
It’s a dramatic reversal of fortunes for the city’s luxury housing market, which broke new records for prices and sales last year. More than 850 homes sold for above $1-million last year, up 16 per cent from a year earlier, according to Sotheby’s International Realty Canada. Much of that growth came toward the end of the year, with sales soaring even as oil prices began their downward slide. But luxury buyers rang in the new year with a sense of panic as major oil producers began slashing jobs and scaling back spending on new projects.
Nearly half of the luxury properties in Calgary’s most prestigious neighbourhood, Mount Royal, have dropped their prices by $100,000 or more, with many homes that were selling well above $1-million now languishing on the market in the six figures. The average detached house in the neighbourhood sold for more than $2.6-million last year, but the neighbourhood hasn’t seen any sales since before oil prices began plummeting in November.
Link: http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/panic-hits-calgarys-luxury-real-estate-as-oil-takes-its-toll/article22796181/?cmpid=rss1