January 28, 2014
“Let me tell you about the very rich. They are different from you and me,” wrote F. Scott Fitzgerald in a famous 1936 short story. Has this sentiment changed much since then?
I try and take a different route into the office as often as I can. Work is around 20 minutes away and as one might imagine, there is only so much variety among roadways between my pad in Mid-town and the office on King West.
But, for the heck of it, I try and mix it up a little, deliberately veering off course a kilometer or two in hopes of spotting something unique.
This morning I drove through Forest Hill & noticed a bevvy of construction activity in different pockets. No folks, high-rise condos are not coming here anytime soon.
These were mainly active renovations on current homes, as well as full on construction of larger mansions on mature lots.
The drive made me reflect on how this city’s luxury housing market was performing compared to other parts of the country.
According to a luxury home report released today by Re/Max, buying & selling activity among the very rich have grown leaps and bounds over the past 12 months. The Report, highlighting trends and developments in 16 major Canadian centers, revealing that:
- Seventy-five per cent of markets experienced year-over-year percentage increases in sales—including
eight markets that posted double-digit gains. Greater Vancouver led the charge with a 36 per cent increase in luxury sales last year, followed by Calgary at 34 per cent, Edmonton at 32 per cent, Hamilton-Burlington at 31 per cent, Kitchener-Waterloo at 27 per cent, Winnipeg at 26 per cent, Greater Toronto at 18 per cent, and Saskatoon at 15 per cent.
- Luxury sales have close to quadrupled since 2009 in Regina (up 288 per cent), tripled in St. John’s (219 per cent), and more than doubled in Winnipeg (189 per cent), Hamilton-Burlington (173 per cent), Saskatoon (157 per cent), the Greater Toronto Area (147 per cent), Greater Vancouver (125 per cent), and Calgary (115 per cent). London-St. Thomas was up 90 per cent, Ottawa increased 86 per cent, Edmonton rose 81 per cent, while Quebec City jumped 76 per cent and Montreal climbed 61 per cent in the five-year period.
“Canada’s luxury housing market has undergone serious transformation in recent years, setting a new standard for lifestyles of the rich and famous,” says Gurinder Sandhu, an executive at RE/MAX Ontario-Atlantic Canada. “High-end homes are commanding top dollar in blue chip neighborhoods from coast to coast. Condominiums are hitting price points that rival single-detached homes. The market is maturing and the appetite is unprecedented.”
Last year’s relatively low interest rate environment, substantial equity gains in Canadian real estate markets,
stellar performance in US equities, and improving economic conditions contributed to the upswing in luxury home sales, driving close to 70 per cent of Canadian markets to new heights in 2013.
Diminished supply of single-family homes—particularly in markets like the Greater Toronto Area and Greater Vancouver—contributed to steady home-buying activity, as pent-up demand persisted. Yet, most purchasers remained grounded, especially at higher price points, and the climate proved fundamentally healthy.
Greater Vancouver experienced the largest bounce back in 2013, with sales of luxury homes posting the second highest level on record. Western Canada claimed the country’s top three high-end markets in 2013. Ontario continued to demonstrate strength in the upper end, especially in Hamilton-Burlington and Kitchener-Waterloo.
Canada’s largest real estate market—the GTA—also reported healthy activity in 2013. Quebec held its own, with luxury sales outperforming overall residential market activity in both Greater Montreal and Quebec City. Atlantic Canada experienced solid demand in St. John’s, where upper end sales were up, but posted a decline in Halifax-Dartmouth.
The surge in high-end home-buying activity dovetails with growing strength in global markets, including London (where sales of homes priced in excess of $8 million are up 24 per cent), and the US, where sales at high end of the market—homes priced at $1 million or more—are selling at nearly triple the pace of everything else.
Local purchasers continue to be the primary drivers in the upper end of the market, as Canadian affluence climbs. The ranks of Canadian millionaires are growing—up approximately 6.5 per cent to 298,000 individuals in 2012 (over 2011)—and with it, the undeniable appeal of bricks and mortar.
The CapGemini report also found that Canadian wealth expanded to $897 billion in 2012—with investment in equities and real estate contributing to the upswing in growth. Some foreign investment was also noted in 2013, most prevalent in markets such as Greater Vancouver and the Greater Toronto Area.
UPPER-END RESIDENTIAL SALES – January 1 to December 31
Market Price Point Sales '09 Sales '10 Sales '11 Sales '12 Sales '13 % +/- St. John's $500,000 54 86 115 161 172 7% Halifax-Dartmouth $500,000 181 205 291 299 268 -10% Quebec City $500,000 116 150 150 196 204 4% Greater Montréal $1 million 251 330 406 436 405 -7% Ottawa $750,000 210 244 360 392 390 -1% Greater Toronto $1.5 million 774 1069 1391 1617 1908 18% Oakville $1.5 million 74 74 95 131 156 19% Hamilton-Burlington $750,000 160 194 249 334 436 31% Kitchener-Waterloo $750,000 n/a 81 86 83 105 27% London-St. Thomas $500,000 107 167 185 194 203 5% Winnipeg $500,000 152 290 359 349 439 26% Regina $500,000 80 127 198 303 310 2% Saskatoon $500,000 197 232 332 440 507 15% Edmonton $750,000 202 248 220 277 365 32% Calgary $1 million 340 367 447 548 732 34% Greater Vancouver $2 million 715 1008 1880 1184 1609 36% Victoria $1 million 219 240 229 227 200 -12%
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