Demand for luxury homes intensifies amid rising Canadian and global wealth
Demand for luxury homes intensifies amid risingCanadian and global wealth
Recordor near-record activity reported in most major centres from coast-to-coast
Improved financial standing among highnet worth individuals is the major factor driving strong sales activity at thetop end of Canadian housing markets, according to a report released by RE/MAX.
RE/MAX Ontario-Atlantic Canada andRE/MAX of Western Canada examined 12 major centres from coast-to-coast andfound that luxury sales have surged in close to two-thirds of housing marketsbetween January 1 and April 30 of this year, compared to the same period in2010. Leading in terms of percentageincreases over the four-month period were Greater Vancouver (118 per cent)—whereforeign investment has also played a major role—Ottawa (59 per cent), Calgary(51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent),Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent). Six of the seven major cities—with theexception of Calgary—are poised to set new records in top-end activity by year-end. Several are just short of peak levelsreported in 2010, such as Victoria, Regina, and London-St. Thomas.
Three key factors—serious equity gains,stock market recovery, and improved economic performance—have been behind thepush for luxury housing product across the country. The combination alsocontinues to bolster the bottom line of high net worth individuals bothnationally and globally. The impact ofthat wealth is being seen in the demand for all things luxury—from homes tocars, collectibles and fine wines.
| UPPER END RESIDENTIAL SALES - January 1 to April 30, 2011 |
| Market | Price Point | Sales '10 | Sales '11 | %+/- |
| | | | | |
| Greater Vancouver | $2 million | 343 | 747 | 118 |
| Victoria | $1 million | 91 | 78 | -14 |
| Edmonton | $750,000 | 87 | 70 | -20 |
| Calgary | $1 million | 96 | 145 | 51 |
| Regina | $500,000 | 42 | 40 | -5 |
| Winnipeg | $500,000 | 75 | 93 | 24 |
| London-St.Thomas | $500,000 | 118 | 107 | -9 |
| Kitchener-Waterloo | $500,000 | 133 | 122 | -8 |
| Hamilton-Burlington | $750,000 | 69 | 78 | 13 |
| Greater Toronto | $1.5 million | 399 | 435 | 9 |
| - Mississauga | $1.5 million | 42 | 17 | -60 |
| - Oakville | $1.5 million | 23 | 37 | 61 |
| - Richmond Hill/Thornhill | $1.5 million | 25 | 32 | 28 |
| Ottawa | $750,000 | 63 | 100 | 59 |
| Halifax-Dartmouth | $500,000 | 60 | 76 | 27 |
| |
| Source: RE/MAX, Local Real Estate Boards |
While foreign investment has augmentedsales activity in several Canadian markets, its influence was only significantin Greater Vancouver. The vast majorityof regions reported that locals were the primary drivers of demand for luxuryproduct. A number of factors position Canada as an attractive option, foremostthat its real estate remains a bargain by international standards, given its rankingfor quality of life, political and economic stability and the strength of itsproperty laws. To those from abroad,it’s the perfect mix.
The strength of the upper-end segmentcontinues to defy expectations. Thatdemand remains largely domestic speaks to the solid underpinnings of themarket, while underscoring the appeal of Canadian real estate on aninternational stage. Western Canada, inparticular, will continue to see the upside benefit of investment from abroad.
The climbing wealth factor has played arole. The financial status and number of millionaires is rising once again—afact supported by several recent studies released by notable institutions suchas CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for FinancialServices, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worthpopulation in Canada and/or abroad—and its corresponding fortunes—is trendingupward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 globalfinancial crisis, most millionaire portfolios/assets have improved or exceedpre-downturn levels. Ofparticular interest, residential real estate holdings have increased among highnet worth individuals, as they express a clear preference for tangibleassets. This trend is expected tocontinue, and serve to boost high-end residential real estate in months ahead,as the move to diversify assets continues in 2011.
As Canada’s millionaire club swells insize, inventory will play an increasing role in future, as the existing upperend housing stock struggles to keep pace with growing demand in central coreareas, particularly in Canada’s gateway centres. Infill, renovation and new construction arehelping to some extent—while driving up prices in tandem. The building activity is also serving tocreate new prime areas in areas that were once considered high-end peripherals,as well as in suburban communities.
Limited inventory levels in Canada’slargest markets have hampered sales activity to some extent in 2011, given thatdemand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto,as buyers compete for quality product in prime neighbourhoods.
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While foreign investment has augmentedsales activity in several Canadian markets, its influence was only significantin Greater Vancouver. The vast majorityof regions reported that locals were the primary drivers of demand for luxuryproduct. A number of factors position Canada as an attractive option, foremostthat its real estate remains a bargain by international standards, given its rankingfor quality of life, political and economic stability and the strength of itsproperty laws. To those from abroad,it’s the perfect mix.
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RE/MAXUpper End 2011.....2
The strength of the upper-end segmentcontinues to defy expectations. Thatdemand remains largely domestic speaks to the solid underpinnings of themarket, while underscoring the appeal of Canadian real estate on aninternational stage. Western Canada, inparticular, will continue to see the upside benefit of investment from abroad.
The climbing wealth factor has played arole. The financial status and number of millionaires is rising once again—afact supported by several recent studies released by notable institutions suchas CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for FinancialServices, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worthpopulation in Canada and/or abroad—and its corresponding fortunes—is trendingupward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 globalfinancial crisis, most millionaire portfolios/assets have improved or exceedpre-downturn levels. Ofparticular interest, residential real estate holdings have increased among highnet worth individuals, as they express a clear preference for tangibleassets. This trend is expected tocontinue, and serve to boost high-end residential real estate in months ahead,as the move to diversify assets continues in 2011.
As Canada’s millionaire club swells insize, inventory will play an increasing role in future, as the existing upperend housing stock struggles to keep pace with growing demand in central coreareas, particularly in Canada’s gateway centres. Infill, renovation and new construction arehelping to some extent—while driving up prices in tandem. The building activity is also serving tocreate new prime areas in areas that were once considered high-end peripherals,as well as in suburban communities.
Limited inventory levels in Canada’slargest markets have hampered sales activity to some extent in 2011, given thatdemand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto,as buyers compete for quality product in prime neighbourhoods.
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