It's just one real-estate deal, but its $10.3-million price tag has reminded Albertans that Calgary, the province's financial capital, is still far from going bust.
"There is still a lot of money in this city," said Donna Rooney, one of the realtors who helped sell the Calgary mansion that has the entire resource-rich province talking.
The 12,700-square-foot Elbow Park home, which boasts imported antique fireplaces, custom inlay hardwood and private courtyards, was owned by former Calgary Flames goaltender Mike Vernon. Listed in May for $10.5-million, it recently sold for $10.3-million, a new residential-real-estate record for the city.
The sale doesn't surprise business owners such as Paul Kuhn. He owns a Calgary art gallery that mainly sells Canadian pieces from $1,000 to $15,000. His gallery also supplied the art used to help sell Mr. Vernon's home."We're busy. Our only slow month was February," Mr. Kuhn said.
"My customers aren't the unemployed construction workers," he later added.
When the global economic recession hit and energy prices collapsed last year, many expected money in Calgary, the headquarters for most of the province's oil and natural-gas companies, would quickly dry up. There were fears that the city, one of the country's fastest rising financial stars, would experience another bust similar to the one in the 1980s when low energy prices and high interest rates devastated the entire province.
This time around, there have been serious economic setbacks. Many condominium developments have been put on hold or scrapped. Employment insurance claims in Calgary have been almost four times higher than the national average. Some businesses, including high-end furniture stores, have even gone under.
But through it all, new ones opened, while others continue to thrive.
"People are still spending," said Julie Denhamer, co-owner of Bite Groceteria, a gourmet grocery store located in Calgary's trendy Inglewood neighbourhood. However, she said many customers are no longer snapping up as many of the store's higher-priced items.
"We've gone from selling premium, premium olive oils by the boatload to our restaurant clients and now they aren't going as much."
Todd Hirsch, senior economist with ATB Financial in Calgary, said the city's real-estate market has been showing signs of life in recent months and the record $10.3-million residential house sale is encouraging.
"It's just a one-house, one-month situation, so you can never read too much into that," he said, "However, it does suggest that the Calgary housing market is relatively healthy."
Mr. Hirsch expects the provincial economy will begin to rebound by next year at the earliest. "We've seen the worst of the recession and it's going to be a gradual climb out of it," he said.
While oil prices have begun to recover, natural-gas prices haven't. Until that happens, Alberta will still be facing tough times, according to Mr. Hirsch.
Natural-gas royalties account for more than half of the province's total non-renewable resource royalties.