Demand for luxury homes in Canada is rising despite gloomy predictions of the housing market. It’s good news, because luxury home sales are traditionally the slowest in the whole real estate industry.
The announcement comes from RE/MAX. It reports the demand for high-end luxury homes was strong in most markets in first three months of 2012. Sales were well ahead of 2011 figures for the same period in most markets across the country, according to the report. From St. John’s to Vancouver the real estate company notes expensive homes are selling at a greater pace than seen in many years.
Its great news for real estate agents who have seen a slowdown in sales in the last part of 2011, but its also positive for Canada’s economy.
Homes sales of any kind stimulate the economy. New homebuyers often purchase new furnishing, appliances and make other big-ticket purchases. A new home is also coupled with renovations that help Canada’s construction industry. Even having a home painted can mean one week’s worth of work for a company.
“Canadians recognize and appreciate the stability of real estate,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Given volatility in other areas, housing has emerged as a blue-chip asset among the country’s most affluent individuals. The capital gains exempt status ups the appeal, particularly as we see ongoing fluctuations in stocks and uncertainty in Europe. All the variables have come together to support an upper-end market firing on all cylinders.”
So, which city saw the biggest increase in luxury homes sales?
The greatest percentage increase was reported in Regina, where first quarter sales of luxury homes priced over $500,000 climbed 56 per cent year-over year. Quebec City placed second, posting a 50 per cent upswing in activity, while Toronto followed closely with a 49 per cent gain.
Also a number of mid sized cities say a increase in sales. London-St. Thomas was up 43 per cent and Kitchener-Waterloo up 39 per cent. This is demonstrating that upper-end enthusiasm is not exclusive to Canada’s larger centres.
“The strength of the upper-end is underpinned by solid fundamentals,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “Most markets remain largely balanced across the board, with stable or modest price growth forecast in the luxury segment. Inventory levels have played a role in some multiple offer activity, with shortages notable in Montreal, throughout Ontario, and Winnipeg. While selection may be adequate in other markets, the demand and competition for quality stands out. Buyers at this price level are very discriminating. They are raising the bar nationwide, altering the Canadian housing landscape in the process.”
Luxury home sales don’t directly indicate the health of our economy but give confidence that one of Canada’s slowest markets continue to see a surge in sales.