Average prospective homebuyers aren’t the only ones facing a shortage of listings in Toronto and Vancouver — wealthy house hunters are experiencing the same thing.
In the Greater Toronto Area and Vancouver, luxury home sales are increasing fastest in the most expensive segments, and there simply aren’t enough lavish properties to meet demand, says the latest bi-annual Top-Tier Real Estate Report from Sotheby’s International Realty’s Canadian branch.
Sales of homes priced over $4 million doubled in Vancouver through the first half of this year, compared to the same period in 2015, and increased 81 per cent in the Greater Toronto Area, according to the report.
Of all markets covered in the report, which also looks at Calgary and Montreal, these were the greatest gains in any of the three “top-tier” price brackets it covers: $1-2 million, $2-4 million and $4 million and up.
“Demand for luxury real estate in Toronto and Vancouver remains unrelenting, far exceeding supply in the higher price spectrums of the market,” said Brad Henderson, president and CEO of Sotheby’s International Realty Canada, in a statement.
From the start of January to the end of June, 439 properties sold for more than $4 million in Vancouver, while 134 homes in this price range changed hands across the GTA.
Sotheby’s looks at sales registered through local multiple listing service (MLS) systems, realtor-operated online marketplaces through which sellers can list homes online. The report includes sales of condo units, attached (for instance, townhouses) and single-detached homes.
So who is buying these opulent properties in the Greater Toronto Area and Vancouver? And is it a sign of foreign investment?
Polly Cordwell, a Vancouver-based managing broker for Sotheby’s, tells BuzzBuzzHome News a broad buyer base is fueling luxury demand, not just wealthy investors from afar.
“We’re seeing buyers come from across the board,” says Cordwell in an email. “There’s healthy local demand and interest, but there are also buyers with origins from other countries, particularly Mainland China,” she adds.
Although they come from overseas, lots of these buyers have local interests outside of real estate investment — at least in Vancouver, Cordwell outlines.
“Many of these buyers already have deep ties to Vancouver: kids attending school here, or family who already live here,” she says, adding, “others are looking for secondary properties.”
Despite its recent recovery to nearly 80 cents, the sagging Loonie has been a driver for demand in the first six months of the year. “The low Canadian dollar is definitely making our real estate more attractive to people from out of the country,” explains Cordwell.