A Million Dollar Marker
A Million Dollar Marker for Alberta’s Real Estate Market
With prosperity comes confidence. In fact – confidence and prosperity go hand in hand. A sense of excitement and hope at the prospect of enjoying the fruits of one’s labour no doubt is manifested in the pleasures of living a truly abundant life, and that could mean building the house of one’s dreams as part of that desire to provide for the family in the style they are now becoming accustomed to.
And so this can be true and said of the Albertan real estate market that has prospered over the decades and has been a recipient of the rewards of the oil and gas industry and the service sector.
A visit to the REALTOR.ca website demonstrates that there are well over 1000 homes listed in the $1million range throughout the province of Alberta.
The majority of these – 885, are to be found in southwest Alberta around various suburbs from Aspen Woods, Altadore River Park, Erlton, Chaparral, West Hillhurst, Knobhl, Garrison Woods to Elboya, Pump Hill, Cougar Ridge, The Slopes, and other areas around and of Calgary; Red Deer, Dunmore, Airdrie and Canmore – to name a few more. Other areas include St. Albert, Ponoka, Gull Lake, and Edmonton area, as well as Rural Strathcona, Rural Sturgeon County, Rural Parkland County; and areas like Rural Leduc County feature some of the more expensive homes listed anywhere from $4 million to $6.9 million. Fort McMurray has its fair share of million-dollar homes with 40 currently listed, as well as 23 in Grande Prairie, Saddle Hills, Edson Rural and up to $4.9 million in Kleskun Springs.
All documented information points to continued growth trends and no doubt in the confidence of the purchasing of higher-end homes. CREA lists Alberta November sales of 2014 up from year-ago levels, especially in Calgary. “Price growth varied among housing markets tracked by the index. As in recent months, Calgary (+8.53 percent).” CREA also states, “Residential sales activity reported through the MLS® Systems of real estate boards in Alberta numbered 4,699 units in November 2014, rising three percent from a year earlier. This was the best November in eight years and the third-highest on record for the month.”
Monthly residential average prices were up from year-ago levels in South Central Alberta (+14.5 percent), Lethbridge (+12.0 percent), Medicine Hat (+8.9 percent), Grande Prairie (8.4 percent), Fort McMurray (7.2 percent), and Calgary (+3.8 percent).” With the total value of home sales up throughout the province, statistics also record an increase in the number of migrants into the region.
“The effect of lower oil prices on Canada’s housing markets is something of a wildcard at the moment,” said Gregory Klump, CREA’s Chief Economist. “It’s not clear how far oil prices may drop or for how long they’ll stay down. How that plays out may affect the outlook for interest rates, job growth, consumer confidence, and sentiment about making major purchases.”
Despite the situation at the moment with the oil prices, REALTORS® are still busy selling and purchasing million and multi-million dollar homes for their clients. That segment of the market has increased consistently over the last five years, particularly in Calgary with the bullish market in this region.
It might be true to say that even in the smaller centres, most of the higher-end homes are still for the most part in the hands of the original owners; business owners of larger companies in the province as well as business owners in the service industry. These homeowners are not too concerned about the situation at the moment. Some REALTORS® point to the fact that land development in specific regions slated for million-dollar homes are sold out and now awaiting building. With the median prices of homes going up to around $700 – $800,000, homeowners with increased purchasing power are using the equity of their homes to confidently trade up to the next level – the million-dollar home.
This upward momentum is driving the trend towards increased demand for the million-dollar home.