Calgary’s top-tier $1-million+ real estate market had a glimmer of recovery in 2017 but has since slipped in the first half of 2018.
The regression has been attributed to high interest rates and the introduction of stricter federal mortgage rules brought in earlier this year, constraining the ability to borrow money and making it harder for first time home buyers to enter the market. The report claims that these factors helped stall progress in a city still recovering from an economic downturn in previous years.
Downward price adjustments have been seen across high-end condos, attached, single-family homes and acreages.
$1-million+ real estate sales have decreased 11% year-over-year to only 350 units sold in the first half of 2018.
The collision of climbing mortgage rates, harsh lending guidelines and increasing governmental policies and taxes have impacted the performance of several top-tier Canadian markets, making recovery more and more difficult.
While the Toronto top-tier market remained incredibly resilient in the first half of 2018, and Montreal continued to grow with confidence, the Vancouver and Calgary markets decelerated as consumer optimism and local purchasing power diminished which may be due to an increase in gasoline prices and higher layoff rates.
Montreal is the only major Canadian market to see year-over-year growth in $1-million+ sales, with a whopping 24% increase. Despite that, reports are anticipating that may diminish in the second half of 2018.
According to a Royal LePage House Price Survey released Tuesday morning, the average house price in Calgary rose by 2.4% this year to $493,820.