Calgary's luxury market no longer starts at $1 million

A surge in demand and sales has pushed the price of luxury homes upward.

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One million dollars isn’t what it used to be in Calgary’s resale real estate market.

Once the entry-point for luxury homes in Calgary, $1 million may still purchase a well-kept, newly renovated single-family home, but the threshold for luxury has moved up a notch, a new report suggests.

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“Everything is getting boosted, and so the entry point for luxury is now elevated, too,” says local realtor Mathew Said Morley with Re/Max First, referring to the finding of the recently published Spotlight on Luxury Report.

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The study by Re/Max found that Canada’s luxury market overall is having a renaissance following the steep rise in interest rates that negatively affected demand across all sectors of the market, including high-end home resales.

Yet in the 10 markets tracked by the study, Calgary saw among the largest year-over-year gains in sales, percentage-wise, in the first two months of 2024, up 52 per cent.

Saskatoon saw the most sizable increase in sales, up about 57 per cent, followed by Montreal, which saw its sales for luxury grow about 56 per cent.

Yet both markets are less active than Calgary’s. In the first two months of this year, Calgary saw 76 sales priced at $1.5 million or higher. By comparison, Montreal saw 14 sales — though its luxury market entry-point, as a metropolitan area of more than 4 million people, starts at $2.5 million.

Saskatoon’s high-end segment, in contrast, begins at $700,000, and in January and February, 22 sales took place in that price range.

It’s no secret what is driving luxury’s rising price tag in Calgary, previously $1 million.

“There has been a significant increase in sales volume and upward price pressure,” Said-Morley says. “Homes that were previously $800,000 to $1 million are now in the $1 million to $1.2 million range, and homes previously priced at $1 million are now $1.5 million.”

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The higher price of luxury aside, Calgary’s market is still a deal compared with larger Vancouver and Toronto, where the luxury entry point is $3 million, as cited in the study.

Both those markets saw gains in luxury sales in the first two months of this year with Toronto’s up about 14 per cent versus about three per cent in Vancouver.

Buyers in Calgary indeed get more for their money.

Consider a recent listing: an acreage-style home in Bearspaw Village with nearly 2,900 square feet, five bedrooms and bathrooms that was recently renovated and priced at about $1.6 million.

By comparison in Vancouver, a nearly 1,500-square-foot new home, with three bedrooms and three bathrooms, sells for about $1.54 million.

And it’s a duplex.

Out-of-province buyers from those more expensive markets recognize the value. And they are buying in Calgary’s luxury market, including condominiums — a segment that had been slumping for years, says Richard Fleming, realtor with Re/Max Mountain View.

“The condo market is the craziest I’ve seen in 10 years,” he says.

About 30 per cent of buyers in the luxury market that Said-Morley works with are from higher priced markets.

“For Calgarians, $1.5 million feels like a large sum of money … but if you get someone from Vancouver or Toronto, they’re thinking they’re getting a huge deal.”

That said, most buyers are local move-up buyers, increasingly confident in the economy.

“There is just a lot more of a sense of security about the market,” he says.

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