There are always some anomalies in real estate markets in all areas of Canada, and right now Toronto is one of those things that just doesn’t belong in a world based on the fundamentals. According to Christy’s international sales of luxury real estate in this city rose by around 37% last year. How does that make sense in a province that is supposed to be a “have not ” area of the country at this time? This does show that there are always places in this country and others that do not follow the rules – and also that those people successful enough to own a multi-million dollar home generally stay that way in all economic climates and many of those hard working people did so with real estate. Toronto happened to beat out a lot of other “sexy” markets such as miami, san francisco, LA, london, and new york in luxury sales last year, not something you normally see – which is great for the realtors in that area. They also did not have to work very hard for it seeing average days to sale averaging only 1 month which is about 1/5 the normal amount of time to sell a luxury property. In contrast to this Calgary and other areas of Alberta were hit very hard due to the downturn in the oil and gas sector over the last few months. The exorbitant prices that we saw in 2014 have swiftly crashed down to earth, and the high end real estate always gets pummeled first when the high ticket execs get moved back to the US where they originally came from after all the projects dry up and engineers and middle managers are scrambling for work. These employees were not often here in Calgary to stay so they are downsizing, moving back home, or panicking now that they can’t make the payments on their homes/cars they bought when times were booming here in Calgary. This trend is normal when times get tough, the luxury end tanks first, then you see the high end drop second, then a slow third you will see the prices of mid and lower priced homes start to slide. Calgary is not new to the boom and bust cycles in real estate, this happens roughly every 10 years or so on average and real estate investors that can see the signs/opportunities in every part of the real estate cycle are gearing up to reap some huge profits when prices start to drop and sales become harder to come by with less buyers in the market. The winds are changing in Calgary real estate, and I for one have an eye out for the deals that are quick upon the real estate horizon!
To your success!