Alberta luxury homes get less than half asking price at auction

An Alberta home withSwarovski crystal-laced faucets and mother of pearl tiles in the master bathroom has sold for nearlyhalf itsasking price.

The 9,200-square-foot house located in Priddis, 40 minutes southwest of Calgary, was listed for $3.9million butpurchasedat auctionfor just over $1.7million.

Another luxury property down the street had a similar fate the $2.9-million mansion was picked up at a 62 per cent discount.

"The buyer paid $1.1 million the price of a dumpy 1970s Vancouver special," wrote investment adviser and former MPGarth Turner in a recent blog.

• Homeowners look to update the 'Vancouver special'

• Vancouver real estate prices pushing millennials to leave city: report

The Realtor representing the two Priddis homes says they were new builds, appraised just under their list price.

"The market tells us what the market tells us. That's what the market dictated at that time,"said MarkEvernden,president of sales withEngel&Vlkersin Calgary.

The price that the buyer paid was "a great savings," he said.

While there is "noquestion" the market has slowed down, Evernden said,there are oftenpersonal things going on behind the scenes that motivate people to move theirproperties quickly.

Deep discounts to come

Turner, who lives in Toronto but has clients in Calgary, said the Hawk's Nest Hollow properties are a sign of"deep discounts to come."

"Around Calgary in the nice suburbs ... where you've got houses in the $1-million to $2-millionrange,you go in with a sharp pencil and a cheque book and you're going to walk out happy,"Turner told the Calgary Eyeopener.

He said the luxury-real estate market in Calgary and surrounding areas has been "taking it in the gut" for the last few months, but thinks it'sworse than anyone is letting on.

On Monday, the Calgary Real Estate Board reported that the average price of a Calgary home dropped six per cent last month from October 2014.

• Calgary house prices drop 6% in October while sales plummet 33%
• Calgary vacancy rate nearly quadruples but average rents remain high

CREB'sstatisticsdon'tinclude sales outside the MLS system, like the two Priddis homes purchasedat auction.

"Builders selling new homes to prospective buyers at deep discounts or private sales none of these are included in the official numbers. And so when you factorthose in, I really believe that the six per cent number is a pale shadow of what's actually happening in the market."

• Listen toGarthTurner on the CalgaryEyeopener

Calgary Eyeopener7:06Garth Turner on the Calgary luxury real estate market

Why are some high-end homes in the Calgary area selling for far below their asking price? Real estate blogger and investment advisor Garth Turner talks about the luxury home market in the Calgary area.

Turner said ifAlberta's energy industry continues to suffer, morepeople willbeforced to make tough choices.

"If you're sitting on a great big pile of bricks and dreams in Priddis, and you can get at least part of your money out instead of maybe taking a bigger loss down the road, you'd be wise to do it."