Luxury home in VancouverPhoto: Sotheby’s International Realty Canada via Livabl

Maybe we need to change the definition of a luxury property.

And the definition of “investment.”

A RE/MAX Canada report says sales of homes worth more than $3 million in Vancouver and Toronto increased by 75 per cent and 112 per cent respectively in the last year, while sales of homes more than $1 million in 17 other smaller cities increased by as much as 500 per cent.

“The currency of home ownership has clearly taken on a new dimension in 2021,” says Christopher Alexander,  president, RE/MAX Canada. “Canadians are moving to secure their future. The pandemic fuelled a run on real  estate that has encompassed every segment of the market, and the value of housing has increased exponentially as a result – not only as a form of shelter but a desirable asset class that provides an attractive return on  investment.” 

The RE/MAX Canada 2022 Luxury Market Report examined trends and developments in sales of freehold and  condominium properties priced over $3 million in Metro Vancouver and the Greater Toronto Area (GTA) and  tracked sales over $1 million in 17 additional Canadian housing markets, including Victoria, Kelowna, Edmonton,  Calgary, Regina, Winnipeg, London, Kitchener-Waterloo, Hamilton, Barrie, Kingston, Ottawa, Halifax-Dartmouth,  Moncton, Saint John, Charlottetown and St. John’s. 

From the report: “According to an analysis of sales provided by RE/MAX brokers and agents based on local real estate board data,  RE/MAX Canada found that 18 of the 19 markets analyzed recorded percentage increases in the double and triple digits. The greatest appreciation occurred in smaller urban markets such as Barrie, London, Kitchener-Waterloo and Hamilton, where sales of homes priced over $1 million have climbed 517.8 per cent, 255.1 per cent, 208 per  cent and 199.5 per cent respectively.

Canada’s largest markets for luxury product – the Greater Toronto Area and  Metro Vancouver – experienced increases of 112.8 per cent and 75.8 per cent respectively for homes over the $3- million price point, while transactions of homes priced over $10 million rose a substantial 156 per cent and 167 per  cent respectively. The only outlier was Charlottetown, where sales over $1 million declined to four units, down  from seven unit sales one year earlier.”

“As high as these numbers are, we believe they just scratch the surface,” says Alexander. “In our view, these levels  likely do not truly reflect what is happening in markets across the country, given an abundance of exclusive sales  and in white-hot markets such as Toronto, instances of private sales where buyers approach sellers whose listings have expired.” 

Executive vice-president Elton Ash said it seems many people were using equity from homes sales in larger centres to upgrade in smaller ones.

“More so than ever before, it appears that buying a home is a retirement strategy which many people believe will help that next generation achieve home ownership,” says Ash.

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