Would-be luxury property investors looking at Calgary need to take a long, hard look at the city’s prevailing economic weakness, Sotheby’s International Realty warned.
In its recent analysis, Sotheby’s cited the long-running sub-par performance of the Canadian petroleum segment – coupled with the delay in oil pipeline development – as one of the major factors influencing the city’s economic woes.
“There are just so many headwinds pushing back against that the Calgary market right now,” Sotheby’s International Realty Canada president Brad Henderson said, as quoted by the Calgary Herald.
“One could argue that’s because the market has been challenged already for a number of years because of the reduction in oil prices.”
In 2018, Calgary’s high-end housing sales fell by 10% year-over-year in the $1 million and above price bracket. More crucially, only one home valued at more than $4 million was sold in the city last year.
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Other factors that that have made themselves felt in 2018 were the city’s unemployment levels and the widespread rejection of the city’s Olympic hosting aspirations – factors that have essentially nullified the optimism brought about by the Calgary luxury segment’s 11% annual gains in 2017.
Together, these elements have engendered a prevailing wariness among investors regarding the market’s long-term prospects and stability.
“We’re not surprised the statistics exemplify what people may be feeling about the Calgary market,” Henderson stated. “It’s a case of one step forward last year and one step back.”
Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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