Sales of $1M-plus homes drop 11% — reflecting 'tenuous state' of Calgary's economic recovery: Sotheby's

Sales of Calgary homes listed for more than $1 million have dropped sharply in the first half of this year compared with last year, says a report released by Sotheby's International Realty.

Mounting supply, slumping demand lowering prices for higher-end single, attached and condo homes: report

Mounting supply and slumping demand have put downward pressure on prices for higher-end single, attached and condo homes in Calgary, according to Sotheby's. (Sotheby’s International Realty)

Sales of Calgary homes listed for more than $1 million have dropped sharply in the first half of this year compared with last year, says a report released by Sotheby's International Realty.

Calgary's $1-million-plus single family home market saw a 13 per cent dip in activity in the first six months of this year, with 304 homes sold, compared with 351 homes sold in the same period last year, according to the company's 2018 mid-year Top-Tier Report.

"The outlook for Calgary's top-tier real estate market reflects the tenuous state of the city's economic recovery, which has not been strong enough to withstand the impact of recent changes in lending conditions and interest rates," the report says.

Overall sales of $1-million-plus residential homes — which includes condominiums and attached as well as single family homes — dipped 11 per cent in the first six months of this year, with 350 units sold compared with 395 units sold in the first six months of 2017.

The report also notes that mounting supply and slumping demand have put downward pressure on prices for higher-end single, attached and condo homes in Calgary.

In the condo market, homes are staying on the market longer, with the average number of days on market for condominiums over $1 million increasing from 57 days in the first six months of last year to 88 days in the first half of this year.

Brad Henderson, with Sotheby's International Realty Canada, says the slump has more to do with consumer confidence.

Buyer's market 

"I think the broader issue is that there isn't the business and consumer confidence in Calgary. That is the real driver," he said.

"But certainly with the interest rate rises, the stress testing, various government policies that have been put in place are having a dampening effect on many of the Canadian real estate markets."

Henderson says that with an increased supply of homes in Calgary priced over $1 million, it's a buyer's market right now.

"I think there was premature optimism in the market and people were thinking that things were getting better and that gave them confidence to go out and buy properties, but what we've seen as of late is that the properties are staying on the market a little longer," he said.

"People are taking them off the market as they are not getting the price they want, so the activity level has subsided relative to last year."