In the Huffington Post Canada’s most recent annual survey of the most expensive homes for sale in Canada (read here), for the first time, a city other than Toronto or Vancouver has taken the top spot for the most expensive homes available in the country. The Multiple Listings Service in the latter part of June listed a residence located in the foothills just west of Calgary, at a starting price tag of a whopping $37.8-million.
A new report released July 8th by Sotheby’s International Realty Canada, a biannual study on market trends for pricey pads in Canada’s largest markets, appears to reinforce the Huffington Post survey, generating quite a bit of buzz among market analysts online. According to the report, sales of houses valued at $1-million and more in Toronto, Vancouver, Calgary and Montreal rose by 32% over the first half of last year. Calgary, widely regarded as the biggest winner so far in 2014, saw a 17% increase in the sale of luxury homes versus last year. And what comes as no surprise, immediately following the release of the report, Sotheby’s announced that it’s doubling its presence in the city. A move that is dramatic, considering two years ago, the luxury real estate agency had no office there at all (read here). Ross McCredie, chief executive officer of Sotheby’s Canadian business, in an interview with the Globe and Mail, said that the sale of $1-million+ homes head doubled in the past year, making the decision an easy one.
But that’s not to say that the luxury housing market isn’t still red hot in Canada’s other major metropolises. Toronto, the country’s largest city, and the city with the highest selling price, saw a 34% jump in sales (up to 3,956 in the six months ending on June 30 from 2,947 last year), of all luxury homes types, including condominium units, townhomes, and houses. The same Sotheby’s report also noted that the demand for luxury real estate in Vancouver is also skyrocketing, with buyers purchasing 40% of available $1-million+ homes and condominiums in the first half of 2014, with the biggest jump in sales — at an increase of 51% — coming in the $4-million-plus category of single-family homes (read more here)
Katia Dmitrieva of Bloomberg argues that the increase in sale is largely due to escalated demand for high-end real estate in Canada, as low mortgage rates and international buyers spur demand and boost prices (read here). Potential homebuyers are exploiting a relatively low of mortgage rate, that has been fixed at 4.8% since May. Sotheby’s analysts expect the high-end real estate market to gain momentum in the latter half of the year, citing a strong economy, increased consumer confidence and mortgage lending rates at historical lows.“These are historically low interest rates and people are confident that they can afford borrowing with the equity in their homes,” McCredie, mentioned in the same interview. “People are realizing that a big chunk of their net worth is in real estate and they’re renovating to increase that. You also have a lot of wealthy international buyers. Canada’s seen as a stable and safe place to invest.”