The high-end real estate market in Canada’s four largest cities will gain momentum this fall with several regions becoming sellers’ markets before the end of the year, predicts Sotheby’s International Realty Canada.
In the first half of 2013 the luxury market gained traction over the last half of 2012, Sotheby’s says, with sales up 65 per cent in Vancouver, 67 per cent in Calgary, 61 per cent in Toronto and 29 per cent in Montreal in the single family home category. Luxury attached home sales in all four markets increased as the average numbers of days on market declined. Sales of condos over $1 million were also up in Vancouver, Calgary and Toronto.
The real estate sales and marketing company says the upswing in luxury sales will be fueled in part by demand from foreign investors.
“The influence of international buyers in the high end will continue to increase in Toronto, Montreal, Vancouver and Calgary,” Sotheby’s says, adding that “the strongest foreign buying influences include China, Russia, the Middle East, India and the United States.”
A luxury home in Canada’s major urban centres costs $2 million dollars on average, with regional variations of course. And speaking of regional variance, let’s take a look at the highlights from the report for each of Canada’s four largest cities, shall we?
- Strong employment and migration numbers reflecting the city’s continued economic health will drive demand — it is estimated that for every 300 square feet of new office space created, an additional person is added to downtown Calgary.
- The high number of executive level jobs created will continue to fuel demand for top-tier real estate as newcomers take advantage of the city’s relatively affordable real estate market to “buy up.”
- With 955 of the 1,239 homes sold over $1 million in the first half of the year being single-family homes, single-family home sales are expected to lead the high-end market.
- Vancouver will continue to be supported by the influence of international buyers — according to Sotheby’s International Realty Canada’s Top Tier Trends study from April, approximately 40% luxury single family homebuyers were from outside of Canada, a trend that is anticipated into the fall.
- As in previous years, China will remain the top market influencer, along with Iran and the United States.
- The tightening supply of top-tier real estate, a tight rental market, as well as stable Bank of Canada interest rates, will be three of the main drivers for a positive fall.
- In spite of negative industry predictions regarding the high-end condo market earlier in 2013, the market segment show signs of strength leading into the fall, with the number of condo resales increasing in the conventional and high end market compared to earlier this year.
- Montreal has led and will continue to lead the country in luxury real estate sales to international buyers — 50% to 60% of high-end homes now sell to foreign buyers, and experts believe that numbers will increase with strengthening demand from Asia and the Middle East.
- The international influence on the market for investment-friendly condos is also notable: foreign purchasers have been buying multiple units of 600 square foot condos in several new downtown developments, a recent and promising trend for the market.
Click here to read the full report.