Low Inventory and High Demand from Domestic and International Buyers, is Driving up the High-End Luxury Real Estate Housing Market
A report says sales of homes worth $1 million or more heated up in Toronto and Vancouver last year as the low loonie fuelled demand from foreign buyers and this phenomenon is continuing this year. (Sean Kilpatrick / CP)
Toronto and Vancouver will continue to lead sales of luxury homes in Canada this spring in both number and average price, says a report released Wednesday.
Sotheby’s International Realty Canada cites macro-economic trends including limited inventory and strong demand from both domestic and international buyers in making its prediction.
The realtor says the Greater Toronto Area will lead the real estate market for dwellings of more than $1 million, as sales continue to increase and prices to rise.
Notable growth is expected in Vancouver, especially in its top-tier residential market, as increases in sales of homes of more than $4 million are expected.
“Luxury home sales in Toronto and Vancouver will continue to defy gravity this spring,” Brad Henderson, president and CEO of Sotheby’s International Realty Canada, said in a statement.
“Both markets have the potential for significant gains and we expect heightened demand and insufficient inventory to drive price escalation and sellers’ market conditions.”
The report said steady economic growth indicators in Quebec have contributed to a balance in the market in Montreal, where numbers for sales of top-tier detached single-family homes, attached homes and condominiums are expected to be comparable to the level they stood at in 2015.
In Calgary, continued economic uncertainty due to troubles in the oilpatch will increase the number of homes available and contribute to a decline in prices in both the markets for top-tier residences and for more typical dwellings in Alberta’s largest city, it said.
The weak Canadian dollar has made real estate more attractive to domestic and foreign buyers.
Sotheby’s says other market fundamentals have had and will continue to have greater impact on market for dwellings of more than $1 million across Canada this spring.
In Vancouver, the first two months of the year saw sales of homes valued at more than $1 million increase 23 per cent year-over-year to 771 units, of which 557 were single-family home sales, a 16 per cent increase.
While the GTA remains attractive for foreign investors and immigrants, local and domestic demand will remain the main drivers in that market, according to Sotheby’s.
Already, the Toronto market has seen a 63-per-cent, year-over-year increase in sales of homes of more than $1 million, up to 1,646 units. Of these, 1,486 were single-family homes.
By comparison, the sale of homes priced $1 million or more rose 23 per cent in Montreal to just 80 units in the first two months of the year. That’s the same number as in Calgary, where the figure represented a one per cent decrease from the same period in 2015.
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