The Calgary luxury real estate market set a record in May with 75 single family homes selling for a million dollars or more, but those elevated levels couldn’t carry on into the following month.
June recorded 52 luxury sales, a sharp decline of -31% month-over-month but a total increase of +2 sales (+4%) from June 2011.
The most active communities were:
- West Hillhurt (4 sales)
- Aspen Woods, Elbow Park, and St. Andrews Heights (3 sales each)
Despite the m/m slowdown, 2012 year-to-date luxury sales far exceed previous years, even surpassing booming 2007.
One of the new rule changes being introduced this month will be nixing mortgage insurance on homes worth more than $1-million. What impact will this have on the high-end market? Hardly any according to industry observers.
A CMHC report indicates that only 5 per cent of all the loans it insures are for amounts over $550,000 (its highest bracket), up 1 per cent in 2011 from the year before. But it appears that for homes worth $1-million or more, the percentage of properties with mortgage insurance is much, much smaller than 5 per cent.
“My team’s estimation is that only 0.1 per cent of $1-million and above home sales have had mortgage insurance,” said Craig Alexander, TD chief economist.
Industry watchers agree with Mr. Alexander, and many noted that down payments on these homes often well exceed the 20 per cent mark. “The larger the purchase price, the more people tend to put down. Usually when people are buying $2-million properties they’re putting 50 per cent down, that’s the trend,” said Dan Eisner, the CEO and founder of True North Mortgage.
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