Question: Do we want to be in line with Toronto?
Via: The Calgary Herald
CALGARY — Calgary is one of Canada’s most robust markets for luxury homes and the baseline entry point for a luxury single-family home is $2 million, which is in line with that of Toronto, says a report by Sotheby’s International Realty Canada.
The Top Tier Trends Report: A Comparative Survey of Canada’s Luxury Real Estate Market said the features and amenities in Calgary reflect a distinctive western Canadian lifestyle.
“According to agents surveyed, top-tier single-family homes start at $2 million dollars with a minimum of 3,500 square feet and are typically in the Traditional, Craftsman/Arts and Crafts, Westcoast Modern or Character architectural styles,” said the report. “‘Must-have’ features include access to schools and shopping, views of downtown, park, river or mountains, and the most desirable neighbourhoods are (Mount) Royal, Brittania, Bel-Aire, Aspen, Springbank Hill, Elbow Park/Elbow Valley, and Inner City Southwest/Westside.”
As Calgary’s market for top-tier homes continues to outpace most of Canada, Sotheby’s International Realty Canada survey findings reveal that demand is predominantly driven by younger buyers, largely in the 35 to 40 year old range who have a skew in preference towards inner-city and Beltline living.
“According to experts surveyed, over 80 per cent of these homebuyers earn an income of $500,000 or higher. They are predominantly employed within the finance and investment banking (mining, oil and gas) or medical sectors, or are entrepreneurs. Most buyers own multiple homes and mortgages are commonly used within this segment of the market,” said Sotheby’s.
“The Calgary market also has the lowest overall percentage of foreign investment of the urban markets surveyed: the majority of purchases of top-tier single-family homes are made by Canadians (85 per cent according to survey results) ... Despite a decline in inventory, the demand for top-tier single-family homes is expected to continue due to strong employment rates, encouraging the migration of a cross section of residents to inner-city homes. This, coupled with low mortgage rates, will continue to sustain the demand for luxury single-family homes in 2013.”
According to the Calgary Real Estate Board, year-to-date until April 17, there have been 204 MLS sales in Calgary of properties over $1 million, up from 140 for the same period in 2012. Last year set a record for the most luxury home sales ever in the city at 544, eclipsing the previous mark of 458 in 2007.
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said demand for luxury homes has been robust in Calgary and this can be attributed to the city’s growing economy.
“Many prospective buyers have been able to find good paying jobs, receive bonuses and see their incomes rise,” he said. “Low mortgage rates combined with a healthy selection of higher-priced homes have also helped luxury homebuyers.”
The report said the average entry price for a luxury single-family home starts at $2.8 million dollars in Vancouver and $3.5 million in Montreal.
Buyers of top-tier homes in Canada are more likely to pay in cash and to utilize mortgages as part of an overall investment strategy, said the report, adding buyers are more likely to own a secondary, vacation and/or investment property that is often used part time as a vacation property in a ski or sun destination.
The strongest foreign buying influences include China, Russia, the United Kingdom and the United States.