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Real eState
Low inventory a challenge for Canada’s luxury real estate market
Calgary’s luxury sales are declining, yet the segment’s relative affordability in Calgary is generating steady interest.
Luxury remains relatively hot in Calgary’s resale real estate market compared with other major markets in Canada, a new report suggests.
In fact, supply is even lower than last year when all resale markets were faced with unprecedented demand.
In part, the low inventory is a result of fewer sellers listing homes, Kottick adds.
While sales are down 64 per cent in the first three months of 2023 in Toronto, year over year, and 53 per cent in Vancouver in their luxury segments, Calgary’s high-end market has fared slightly better, down 36 per cent.
When compared with activity in the years before the pandemic, however, luxury market activity in Calgary so far this year is 223 per cent higher than the first quarter of 2020.
Driving the pace is low inventory among resales and even new homes.
In particular, prices in the new homes market for luxury are higher than they were before the pandemic as both material and labour costs have increased over the last year. At the same time, builders are also hampered by higher financing costs, Starnes adds.
The end result is less choice among both new builds and resales for luxury buyers.
While sales are down, demand in the Calgary market is still being driven by out-of-town buyers, mostly from Ontario, Kottick adds.
These are often buyers from the Greater Toronto Area where the average price of a home still exceeds $1 million. There, the luxury segment starts at $4 million, the Sotheby’s report notes.
In turn, buyers from Toronto who would have been looking in the mid-price ranges there may find themselves luxury buyers here, as the Sotheby’s report points out that Calgary’s luxury market starts at $1 million.
“Many of the luxury homes selling are in Springbank, Elbow Valley, Stonepine,” she says. “These communities are about eight minutes out of the city, so they are essentially like the suburbs.”
Sales for luxury homes — like other price ranges — is likely to see consistent growth in the coming months and years, Kottick forecasts.
This will largely be the result of ongoing low supply and anticipated demand growth in the face of federal government policy that aims to bring about 500,000 newcomers to Canada annually through to 2025.
“That means more people coming to Alberta, which means more buyers and more pressure on the inventory,” he says.
“But that’s not just a problem in Alberta; it’s a problem universal to Canada.”
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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
The Canadian Press. All rights reserved.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
The Canadian Press. All rights reserved.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
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