Six Canadian markets set records for upper-end sales in the first quarter
Spring is in the air and nowhere is that more evident than in the country’s luxury housing market.
After a subdued start in the first quarter, the RE/MAX Upper End Report found that demand for upscale properties is once again on the rise.
Eight out of the 16 major residential housing markets examined posted sales on par or ahead of last year’s levels in the first three months of the year. Percentage increases were led by Calgary (50 per cent), Edmonton (41 per cent), Regina (10 per cent), Saskatoon (6 per cent), Winnipeg and London-St. Thomas (five per cent), followed by Quebec City at three per cent. Six markets posted new records for first quarter sales, including London-St. Thomas, Hamilton-Burlington (which matched the record 2012 pace), Quebec City, Regina, Saskatoon, Edmonton and Calgary. For the second consecutive year, Greater Toronto secured the top spot for the greatest number of upper-end sales in the first quarter.
Luxury sales in Ontario-Atlantic Canada were hampered by a variety of factors out of the gate in 2013. Inclement weather had a significant impact on most major markets, while supply was reportedly tighter in Greater Toronto’s core neighbourhoods, pockets of Ottawa and Kitchener-Waterloo, as well as the $800,000-$900,000 price point in Hamilton-Burlington.
With improved momentum now emerging, at least 12 markets expect sales to match or exceed 2012 levels by year end 2013—including six out of seven Ontario-Atlantic markets: St. John’s, Halifax-Dartmouth, Ottawa, Greater Toronto, Hamilton-Burlington and London-St. Thomas.
Homebuying activity in the top end is forecast to return to more normal levels in the days and months ahead. Low interest rates, softer housing values in some centres, and robust equity gains over the past decade should continue to bolster the market. Pent-up demand should also play a role in Ontario, Atlantic Canada and the Western Provinces.
Local buyers will be the predominant force at the upper end, but foreign investors—while fewer in number—will also have an impact on the market moving forward. Over the long term, luxury sales will be propped up by accumulating wealth in Canada, as those dollars inevitably filter into the housing market.
Overall, the outlook is positive for Canada’s upper-end market. A good selection of inventory is available in most major centres. Prices have largely stabilized or posted modest increases. Historically low interest rates and strong equity gains will continue to prompt buyers to make their moves. With favourable conditions in place, the healthy appetite that exists for luxury product across the country is unlikely to subside any time soon.