According to Sotheby’s International Realty Canada CEO, Ross McCredie, “Several factors are driving Canada’s high-end real estate market in 2014: net migration into major urban markets, immigration of high net-worth individuals into cities like Toronto and Vancouver, significant transfer of wealth between generations and historically low interest rates. Heading into the second half of the year we expect Canada’s high-end housing market to remain strong, especially in the single-family home category where inventory remains tight. We’re also expecting to see renewed confidence in Montreal’s real estate market given the recent change in the political climate.”
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In a report released by Sotheby’s International Realty Canada, high-end residential real estate sales in Canada’s key metropolitan centres continued to make strides in the first half of 2014.
Building on momentum from the latter half of 2013, home sales over $1 million showed a positive upward trend in the first half of 2014, with all major markets experiencing year-over-year growth of 34% (Vancouver), 17% (Calgary), 34% (Greater Toronto Area) and 11% (Montreal) respectively. Based on these gains, it appears the removal of Canada’s Immigrant Investor Program has had no impact on the luxury real estate market year-to-date. Additionally, momentum is expected to continue throughout the year given strong economic fundamentals, increased consumer confidence and mortgage lending rates that remain at historical lows.
The bi-annual report, compiled by Sotheby’s International Realty Canada, examines the number of million dollar-plus residential properties sold from January 1 to June 30, 2014 in Vancouver, Calgary, the GTA, and Montreal. The report analyzes the sales volume, number of days on market and percentage of homes sold over the asking price for million dollar-plus homes.
Luxury Homes Canadian Top-tier Real Estate Market Highlights include:
Demand for homes over $1 million intensified in Vancouver during the first six months of 2014 and the market is expected to gain momentum through the second half of the year. From January 1 to June 30, 2014, sales over $1 million increased to 1,664 units for condominiums, attached and detached single-family homes combined, 34% more than the 1,239 units sold during the first six months of 2013. Greatest sales gains were seen in the single-family home sector posting a 38% increase year-over-year, followed by a 37% increase in condo sales, indicating no sign of a bubble in the market.
The Calgary market remained strong through the first half of 2014, posting a 17% increase in home sales over $1 million (condominiums, attached and detached single-family) compared to the same period in 2013. Bolstered by the city’s thriving economy, the strength of its oil and gas sectors, low unemployment rates, high average net incomes and strong net migration, the market for high-end homes continued its upward trajectory with single-family home sales up 19% and attached home sales up 21% year-over-year. Due to limited inventory in Calgary’s condo market, sales decreased 25% compared to the same time last year. With a number of new high-end condo projects recently announced in Calgary’s downtown core, it is expected that the volume of luxury condo sales above $1 million will increase in the second half of 2014.
Greater Toronto Area (GTA)
In the first six months of 2014, the GTA (Durham, Halton, Peel, Toronto and York) recorded a 34% increase in sales of $1 million homes, compared to the same period last year. From January 1 to June 30, 2014, there were a total of 3956 units sold over $1 million, with condominiums, attached and detached single-family homes posting sales gains of 53%, 40%, and 31% gains respectively. Historically low interest rates, increased consumer confidence, population growth due to immigration and tight housing inventory have all contributed to increased activity.
Despite a soft start to 2014, Montreal’s high-end real estate market began to recover in April following the provincial election of a Liberal majority government. Post-election consumer confidence contributed to an uptick in late-spring sales: 228 Montreal properties (condominiums, attached homes and detached single-family homes) over $1 million sold between January 1 and June 30, 2014, compared to 206 units sold during the first six months of 2013, amounting to an 11% year-over-year increase. Montreal’s single-family home segment saw the greatest year over year gains with a 16% increase for homes sold over $1 million.