Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.
Article content
Falling interest rates are expected to drive luxury demand this fall in Calgary and, for that matter, across Canada, a new report forecasts.
“The positive news in the report is that falling inflation and interest rates encourage luxury buyers to be more active in the market,” says Phil Soper, president and chief executive officer of Royal LePage.
He notes that luxury buyers across Canada and in Calgary have not been immune to the economic challenges over the past two years as interest rates increased rapidly to combat inflation.
Article content
Yet Soper notes that luxury buyers have not been active due to higher rates for mortgages, given they often have more equity to bring to bear when making a purchase. Rather, they have delayed buying decisions based on the notion that high inflation and higher rates were signs of economic weakness and uncertainty.
“If you’re among these buyers, you’re probably more in tune with employment trends, and whether the economy is expanding or contracting.”
The new Royal LePage Carriage Trade Luxury Market Report suggests that luxury buyers see the economy turning the corner for the better.
It cites strong demand in the first eight months of 2024 for most major cities, including Calgary where luxury sales grew nearly 31 per cent from the same period last year.
At the same time, the median price actually declined slightly (-0.3 per cent) to $2.143 million.
Yet the entry price point for luxury Calgary is also substantially higher, reaching $1.75 million, whereas prior to the pandemic entry luxury-level was about $1 million.
The strength in the city’s luxury market comes as no surprise to a local realtor active in the segment.
Article content
“The luxury market has soared the last 90 days largely for properties located in southwest Calgary and (the) west (side) into the Rocky View and Springbank areas just outside of the city,” says Rachelle Starnes, real estate associate with Coldwell Banker Mountain Central.
More than 75 per cent of sales over $1.5 million have been for large, two-storey homes with about 30 per cent of those taking place outside of city limits, she adds.
Soper says the trend in Calgary’s market is reflected more widely across Canada.
“We’re seeing an uptick in activity” with buyers wanting larger spaces outside of major cities, he adds.
Some of the hotter markets in past years — notably Vancouver and Toronto, highly urbanized markets — may reflect that trend. They were among the three cities in the report that saw sales decline during the first eight months of this year, compared with the same span last year.
Toronto sales fell five per cent while Vancouver luxury sales plunged nearly 39 per cent. Halifax also saw luxury sales decline year over year about 17 per cent.
Yet even those cities could see upticks in the fall as the report forecasts that the luxury market will become increasingly busy, driven by a declining rate environment.
As well, many luxury buyers are likely to want to get a head start, anticipating a busy spring market that could come early in 2025.
“There is a lot of talk about a ‘pull-ahead’ for the spring,” Soper says, likening conditions to 2021 when sales records fell in February in many markets.
“For the high-end market, we believe that, while the fall won’t be a gold rush, we’re expecting the spring market to start in February or even late January, and buyers and sellers will want to ahead that wave of demand.”
Share this article in your social network