Photo: Tracy O/Flickr
What do the wealthy do in Canada during a recession? Buy houses, apparently.
And not just any old homes, either. The recession over the first half of this year hasn’t discouraged well heeled investors from purchasing luxurious abodes in the nation’s strongest real estate markets, according to a Sotheby’s International Realty report released today.
In fact, sales of million-plus-dollar condo units and attached and detached single-family homes were way up in the Greater Toronto Area and Vancouver during the first six months of this year.
The GTA saw sales of these properties climb 56 per cent year-over-year during this period, while Vancouver’s rose 48 per cent.
Out west this boost was partly attributed to more and more foreign buyers entering the market, while in the GTA limited supply was a major factor. The low 0.5 per cent key interest rate, which the Bank of Canada maintained earlier this month, stoked sales in both markets.
Though it’s worth noting that the average sale price of detached house in both Vancouver and Toronto was over $1 million in August, homes with even heftier price tags were also moving at a markedly higher volume than last year in these markets.
In the $2 to $4 million range, home sales were up 52 per cent in Vancouver and 46 per cent in the GTA.
It was the same story for homes that cost more than $4 million. In Vancouver and the GTA, the sales of these swanky homes climbed 71 per cent and 72 per cent respectively.
And over the months of July and August, the sales of these ultra-high-end homes heated up even more in the GTA. Sales were up a whopping 158.3 per cent year-over-year during this period.
Considerable increases in high-end home sales aren’t limited to those two cities. From January to June this year, Montreal also experienced a boom, with sales of homes over $1 million rising 20 per cent year over year.
Of the four cities the report tracked, Calgary was the only market to see a decline in this seven-figure home activity. Sales were down 36 per cent there. Sotheby’s expects this local downward trend to persist as low oil prices lead to increased unemployment in the final quarter of 2015.
However, the corporation forecasts the upward trend seen in the GTA and Vancouver markets to continue, and developments overseas are also expected to continue playing a part in bolstering upscale real estate activity.
“International demand for top-tier real estate in Canada’s major cities is expected to remain high as volatility in global stock markets and a faltering Chinese economy results in a continued influx of buyers, particularly from mainland China,” the Sotheby’s report said.