The new reality of Calgary's housing market
Even a build of great quality has seen its value drop by $2-million in five years
In 2002, Scott Inglis watched construction begin on 4219 Britannia Dr. S.W. from his bungalow at 4243 Britannia. The impressive build was being undertaken by Ruth Chad, who at the time was in her 70s, and her neighbours were watching the project with interest.
"The zoning for this house was really special because it was the only one in the whole street zoned for more than a single storey," says Mr. Inglis, 49, "everything else was, and still is, a bungalow. I guess she had good connections with the city."
At two-and-a-half storeys and 8,500 square feet of above-ground living space (11,000 square feet in total), the property would be one of Calgary's largest inner city homes with an enviable position on a prestigious property ridge in the southwest community of Britannia.
Ms. Chad's vision included an enormous master suite plus three additional bedrooms, seven bathrooms, a home theatre, office and library, dressing room and spa, an indoor swimming pool and steam room, gourmet kitchen and formal dining room. All of which would be built around a central atrium with a large vaulted skylight. There would also be two panic rooms including a fully equipped Cold War nuclear shelter 15 feet below ground.
"The construction was slow but meticulous," Mr. Inglis recalls. "I believe several architects were fired in the process. It was solid concrete, constructed like a European country estate and built to last 200 years. Something you don't find much in Calgary any more."
Then, in 2011, with the house finally close to completion, Ms. Chad passed away. She never lived in the home she had so carefully constructed and, in 2012, it was put on the market at $4.99-million as one of Calgary's most expensive inner-city properties.
Mr. Inglis, a retired managing director of institutional sales and trading at FirstEnergy Capital, who in the 1990s and early 2000s had "caught the perfect wave to create wealth in the energy business," wasted no time in expressing his interest.
"My bungalow was on a better lot, higher up the escarpment, but this was more than twice the house," he says, "which is impossible to buy or build anywhere else on Britannia Drive due to zoning."
Mr. Inglis paid $6-million for the home in a bidding war, a price he still believes represented fair market value for the property.
"Even at $6-million, it was still far less than it would have cost me to level and rebuild my bungalow to a similar specification," he explains.
Mr. Inglis sold his bungalow at 4243 Britannia Drive for $3.6-million, having purchased it in 1995 for just $600,000.
"The rebuild value on the property is $8-million. You can't rebuild a house of this size in sandstone and solid concrete for less than $7-million," he continues.
But just five years later, with Calgary's resale market entering its third consecutive year of decline and Mr. Inglis going through a divorce, 4219 Britannia Dr. is back on the market for just $3.995-million. It's what Mr. Inglis's agent Thomas Keeper calls "an aggressive sales strategy."
"The property was listed at $6-million between December, 2015, and November, 2016," says the agent who took on the challenge of selling the property at the end of last year, "but we took the decision to reprice it to try to achieve a sale."
"Calgary has significantly more sales activity under $4-million than over it," he adds.
According to the Calgary Real Estate Board, 2016 saw four sales over $4-million compared with 15 over $3-million. And even in better times, that market is still small; in 2014 there were six sales over $4-million compared with 28 over $3-million.
The new price tag comes with a full interior redecoration, even though the home has been lived in for less than four years in total.
"It's going to be an incredible purchase for somebody because I guarantee when the market turns around this home is going to be reappraised at $6-million," Mr. Keeper says. "It's greatly undervalued due to circumstance."
Coincidentally, Mr. Inglis's previous home at 4243 Britannia Dr. is also looking for a buyer. The luxurious 1950s bungalow with 2,950 square feet of living space is on the market at $3.35-million, 7 per cent less than its 2012 sale price.
Meanwhile, Mr. Inglis, who intends to relocate to the Mediterranean after the sale, remains philosophical at the prospect of losing $2-million in five years.
"I grew up in a trailer park in Indiana," he says, "so I'm not going to lose sleep over it."
"I funded my own business degree," he continues. "Within two years of moving to Calgary I bought the bungalow on Britannia Drive from a hockey player, Al MacInnis, who was traded to the St. Louis Blues. Everyone on the street thought I'd made my money from the Bre-X scandal or that I was some kind of drug dealer but it was all from investments."
But he admits that 4219 Britannia Dr. has not been a good investment.
"I predicted that the house would hold its value in any market because I believe there's value in purpose and this house was built with great purpose," he says. "That hasn't proven to be correct. But that's Calgary: It's a cyclical and commodity-driven economy and real estate is part of that."