It is not a secret that Toronto’s housing market is on a feverish rampage in recent times as far as growth is concerned but do you know that it is not only that homes are selling faster and people are buying every piece of available property, they are actually buying million-dollar homes more and more. Yes! The luxury home market has reached new heights in 2014 and the trend is expected to continue this year. Sounds juicy? Read on.
The Luxury Home Fever
Earlier this month, Sotheby International Realty released a report which states that the sales of homes with values of a million dollars or more has significantly increased in four major Canadian real estate markets in 2014. The report says that Vancouver got a 25% increase in luxury home sales as compared to its 2013 record. Not to be left behind, Toronto’s high-end homes market climbed 38% for 2014 and is expected to continue being red-hot this year.
Driven By Demand
In one of our previous blogs, we mentioned that homes in the GTA are being sold over the asking price because of the high demand and limited supply. Could this be the reason why more expensive homes are being sold? If we are going to base solely on reports, then this case is indeed true as more and more homebuyers are flocking to very desirable locations and hence, are driving the prices up. Sotheby’s analysis did state that Calgary’s and Montreal’s high-end real estate markets will be more balanced as demand in those areas are not as high as is in Vancouver and Toronto. Ross McCredie, Sotheby’s president and chief executive did say on an interview that they are watching Calgary very closely to see how the market there fares.
More Foreign Buyers
According to McCredie, foreign investors are purchasing about half of the $5 million and above homes in Toronto’s and Vancouver’s markets although foreign ownership is estimated to be on the lower end by a report from Canada Mortgage and Housing Corporation. In fact, the December 2014 report by CMHC says that only 2.3% of condos for rent in Vancouver and 2.4% of the same in Toronto are owned by foreigners. Of course it does help that luxury homes often have the amenities that homebuyers love so it goes without saying that those who can afford it will certainly go for the prime pieces of available real estate.
McCredie says that the actual percentage of foreigners who buy Canada’s million dollar homes can actually be higher as a lot of them transact through Canadian subcompanies and therefore are not accurately represented in the CMHC data. Sotheby, being in the market of brokering sales of luxury homes has a better position to gauge just how much the foreign involvement is in this luxury home trend.
Better Days Ahead
Is this trend going to be a problem in the event of an economic downturn? McCredie says the risk is low as foreigners see investing in Canadian properties particularly in Vancouver and Toronto as an attractive real estate purchase because of high levels of immigration and historically low mortgage rates. The good thing about this? This will result to a stronger real estate market which is beneficial to everyone who is smart enough to buy properties in prime location at the right time. Isn’t that something to smile about?
Want your piece of the action? Invest in an elegant luxury home in beautiful Oakville. Contact us to know more and to request a showing. Remember, a smart investment today is a great business deal for days to come. Successful individuals grab opportunity while it’s hot. Cheers!