The drop was fuelled by general economic and petro-industry weaknesses
Following the recent national trend, Calgary’s luxury housing market suffered from a notable decline last year, a development that Sotheby’s International Realty largely attributed to the city’s economic realities and the impact of weaker performance in the Canadian petroleum segment.
“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.”
Sotheby’s noted that the city’s sales activity involving homes valued at more than $1 million fell by 10% year-over-year in 2018.
However, these declines were not as grave as the shrinkages observed in Toronto and Vancouver. During the same time frame, top-tier activity in the country’s two most in-demand markets dropped by 31% (Toronto) and 26% (Vancouver).
Read more: Luxury housing sales in leading markets decelerated noticeably
Other factors that might have affected Calgary’s 2018 numbers were the concerning unemployment figures, the delay in the oil pipeline development, and the populace’s no-vote on the city’s Olympic hosting aspirations.
These influences were more than enough to offset the optimism brought about by 11% annual gains seen by the city’s luxury market in 2017. The impression of a lack of long-term stability has also made would-be investors “wary of the city’s current market conditions.”
“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.”
