canada luxury home market Photos: Gord McKenna/Flickr

Million dollar home sales surged between 11 and 34 per cent in each of Canada’s four largest cities during the first half of the year, according to Sotheby’s International.

“Building on momentum from the latter half of 2013, home sales over $1 million showed a positive upward trend in the first half of 2014, with all major markets experiencing year-over-year growth,” the agency stated in its bi-annual Top-Tier Real Estate Report.

According to Sotheby’s CEO Ross McCredie, several factors are driving the country’s luxury real estate market.

“…net migration into major urban markets, immigration of high net-worth individuals into cities like Toronto and Vancouver, significant transfer of wealth between generations and historically low interest rates,” McCredie said.

But that was then. What will the rest of 2014 look like?

“Heading into the second half of the year we expect Canada’s high-end housing market to remain strong, especially in the single-family home category where inventory remains tight,” McCredie continued. “We’re also expecting to see renewed confidence in Montreal’s real estate market given the recent change in the political climate.”

Regional highlights from the report

Vancouver

Home sales of at least $1 million were up 34 per cent in Vancouver during the first half of the year. The greatest sales gains were seen in the single-family home sector, which posted a 38 per cent increase year-over-year, followed by a 37 per cent increase in condo sales. According to Sotheby’s, this indicates that there is “no sign of a bubble in the market.”

Calgary

Luxury home sales climbed 17 per in Calgary from the first six months of 2013 compared to the first six months of 2014. The gains were bolstered by the city’s thriving economy, the strength of its oil and gas sectors, low unemployment rates, high average net incomes and strong net migration. Single-family home sales of $1 million or more were up 19 per cent and attached home sales up 21 per cent year-over-year. However, due to limited inventory, luxury condo sales decreased 25 per cent compared to the same time last year. But, with a number of new high-end condo projects recently announced in Calgary’s downtown core, Sotheby’s says it expects the volume of luxury condo sales to increase in the second half of 2014.

GTA

From January 1 to June 30, 2014, there were a total of 3956 units sold over $1 million, with condos, attached and detached single-family homes posting sales gains of 53 per cent, 40 per cent, and 31 per cent gains respectively (the luxury market was up 34 per cent overall). Historically low interest rates, increased consumer confidence, population growth due to immigration and tight housing inventory all contributed to the increased activity, Sotheby’s said.

Montreal

Despite a soft start to 2014, Montreal’s high-end real estate market began to recover in April following the provincial election of a Liberal majority government. Post-election consumer confidence contributed to an uptick in late-spring sales: 228 Montreal properties (condos, attached homes and detached single-family homes) over $1 million sold between January 1 and June 30, 2014, compared to 206 units sold during the first six months of 2013, amounting to an 11 per cent year-over-year increase. Montreal’s single-family home segment saw the greatest gains with a 16 per cent increase for homes sold over $1 million.

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