An Alberta home with Swarovski crystal-laced faucets and mother of pearl tiles in the master bathroom has sold for nearly half its asking price.
The 9,200-square-foot house located in Priddis, 40 minutes southwest of Calgary, was listed for $3.9 million but purchased at auction for just over $1.7 million.
Another luxury property down the street had a similar fate — the $2.9-million mansion was picked up at a 62 per cent discount.
"The buyer paid $1.1 million — the price of a dumpy 1970s Vancouver special," wrote investment adviser and former MP Garth Turner in a recent blog.
- Vancouver real estate prices pushing millennials to leave city: report
The Realtor representing the two Priddis homes says they were new builds, appraised just under their list price.
"The market tells us what the market tells us. That's what the market dictated at that time," said Mark Evernden, president of sales with Engel & Völkers in Calgary.
The price that the buyer paid was "a great savings," he said.
While there is "no question" the market has slowed down, Evernden said, there are often personal things going on behind the scenes that motivate people to move their properties quickly.
Deep discounts to come
Turner, who lives in Toronto but has clients in Calgary, said the Hawk's Nest Hollow properties are a sign of "deep discounts to come."
"Around Calgary in the nice suburbs ... where you've got houses in the $1-million to $2-million range, you go in with a sharp pencil and a cheque book — and you're going to walk out happy," Turner told the Calgary Eyeopener.
He said the luxury-real estate market in Calgary and surrounding areas has been "taking it in the gut" for the last few months, but thinks it's worse than anyone is letting on.
On Monday, the Calgary Real Estate Board reported that the average price of a Calgary home dropped six per cent last month from October 2014.
- Calgary house prices drop 6% in October while sales plummet 33%
- Calgary vacancy rate nearly quadruples but average rents remain high
CREB's statistics don't include sales outside the MLS system, like the two Priddis homes purchased at auction.
"Builders selling new homes to prospective buyers at deep discounts or private sales — none of these are included in the official numbers. And so when you factor those in, I really believe that the six per cent number is a pale shadow of what's actually happening in the market."
Listen to Garth Turner on the Calgary Eyeopener
Turner said if Alberta's energy industry continues to suffer, more people will be forced to make tough choices.
"If you're sitting on a great big pile of bricks and dreams in Priddis, and you can get at least part of your money out instead of maybe taking a bigger loss down the road, you'd be wise to do it."