Photo: Grace Tower
Canada’s high-end housing market is expected to post “stable gains” through the fall and into early 2015, according to a new forecast from luxury realtor Sotheby’s International Realty.
Historically low interest rates, positive economic and employment growth and relative political stability are expected to contribute to a balanced national market, while luxury home sales in Toronto — fueled by strong consumer demand and low inventory — outpace all other major markets, even Vancouver.
Sotheby’s singles out the Bank of Canada’s decision to maintain its one per cent overnight rate as a move that will have a positive impact on million dollar home sales.
“The move facilitates consumer borrowing towards homeownership, offsets the impact of price gains on affordability and underscores a conservative approach to fiscal policy that is attractive to foreign investors,” the report reads.
And now, a closer look at what’s in store for each of the four markets studied.
Heading into fall 2014, Sotheby’s says Vancouver will continue to experience modest but positive momentum in the sale of one million dollar homes, with single-family homes leading the way. However, luxury townhome sales, which saw a significant increase in the summer, are also expected to continue their upward trend “as low inventory in the single-family market creates demand for alternatives.”
After leading Canada’s high-end real estate market in nearly every category in 2013 and 2014, Calgary’s market is expected to “balance” in the final quarter of the year. Over the summer months, new inventory over $1 million emerged to meet strong consumer demand, particularly in the condo market, a trend which is expected to continue in the fall. At the same time, Calgary’s robust economy is expected to sustain demand for luxury real estate, and notable growth is expected in the $4 million single-family home market throughout the fall and into 2015 as this category has already outpaced 2013 sales numbers.
Following a 34 per cent year-over-year increase in homes sales above $1 million in the first six months of 2014, the GTA (Durham, Halton, Peel, Toronto and York) is expected to lead Canada’s high-end real estate market in every category: single-family homes, townhomes and condos. Throughout the summer, Toronto experienced record-setting sales with July numbers representing one of the strongest months of the year. The $2 million plus price range performed exceptionally well, with a greater number of homes sold over $2 million than within the $1.5 to $1.75 million range. The market is expected to favour sellers into fall 2014, driven by lack of inventory and strong consumer demand for single-family homes. In turn, this is expected to impact condos, as buyers priced out of the attached and single-family home market look for alternatives, and migration and immigration into the urban core continues.
Sotheby’s predicts Montreal’s high-end real estate market will be balanced this fall 2014 due to the city’s recent return to political and economic stability following the spring election of a Liberal majority government. Consumer confidence in the real estate market and economy prompted increased market activity in the million dollar plus real estate segment in the spring and into the summer. In the first half of 2014, Montreal properties over $1 million increased by 11 per cent year-over-year with 228 homes sold. The high-end market is expected to remain consistent in terms of both sales and prices in the fall, with the majority of luxury sales anticipated in the $1 to $2 million single-family market.