Sales of homes priced over $1 million were up year-over-year in Toronto, Vancouver, Montreal and Victoria in the first seven months of the year. Calgary was the exception; sales in the $1 million range decreased 28 per cent over the same period in 2014.
In Canada’s two largest luxury markets, sales of homes $3 million and up saw impressive gains. In the Greater Toronto Area, sales in this range increased by 119 per cent and in Greater Vancouver by 79 per cent between January 1 and July 31.
The increase of sales at the top-end of the luxury market can be attributed to two factors. One is overall price appreciation in both markets, driven by low inventory and high demand for single-family homes that hasled to more homes meeting the higher dollar threshold. A second factor is high demand for luxury homes from foreign buyers in both markets.
In Calgary, a healthy 2.3 to 2.5 months’ supply of inventory in the $1 million plus range has brought a more balanced market to the city. Luxury buyers are not witnessing a notable decrease in price; however, there is less pressure for buyers during the negotiation process. With more inventory available, conditions like home inspection and financing, which were rarer when buyers were frequently in a competing offer situation, have become part of the normal negotiation process again.
RE/MAX brokers and agents reported that foreign buyers have continued to drive demand in the Vancouver and Toronto luxury markets in the first half of 2015. These buyers, primarily from China, are typically families with children who are relocating to Canada to live. They’ve chosen Canada for its stable economy and high quality of life, and their real estate decisions are strongly influenced by proximity to good schools.
Although foreign buyers are less active in Montreal’s luxury market compared to Toronto and Vancouver, RE/MAX brokers and agents have reported a substantial increase in foreign buyers in Montreal during the first seven months of 2015. Its relative affordability, aided by the strength of the yuan compared to the Canadian dollar during this period, make the city a
good value proposition for foreign buyers.
In regions where condominiums are a significant part of the luxury market, sales of condominiums priced over $1 million rose year-over-year. Montreal, Toronto and Vancouver all saw an increase of high-end condominium sales. While demand in the luxury freehold market was driven primarily by families, luxury condominium buyers tend to be Baby Boomers who are downsizing during retirement. These buyers tend to spend part of their time in a second home or travelling, and choose condominiums for access to luxury amenities without the maintenance required of a house.
Based on interviews with RE/MAX brokers and associates, luxury market trends seen in Canada’s major markets during the first seven months of the year are expected to continue through the end of 2015. Click Here or on the image below for the full report:
