Warnings about a potential housing bubble in Canada haven’t held back the wealthy from snapping up homes across the country, says a Yahoo! Canada report.
A new survey of Canada’s high-end housing market shows sales skyrocketed last year, with more than two-thirds of major markets setting new records.
According to the RE/MAX Upper End Report, 75 per cent of the 16 markets surveyed saw sales increases over the past year and eight of them posted double-digit gains.
Vancouver, the country’s most expensive market, led the market with a 36 per cent jump in high-end sales. It was also home to the most-expensive sale of the year, which was a three-bedroom, two-level condo valued at about $25 million.
Greater Vancouver also experienced the largest bounce back in sales, with luxury homes posting the second highest year on record, which was 1,690 properties each valued at more than $2 million, RE/MAX says.
Calgary and Edmonton were also strong, with high-end home sales rising 34 per cent and 32 per cent respectively. In Calgary, that was 732 properties priced at more than $1 million. In Edmonton, 365 high-end homes, valued at more than $750,000, were sold.
"Canada's upper-end housing market continues to set a new standard year after year," RE/MAX’s Sylvain Dansereau stated.
While sales have surprised across the entire housing market in recent months, Dansereau called the increase in luxury homes “striking.”
"From high-end homes to condominiums, the market is evolving,” she said. “It's not only raising the bar, but price tags in the process."
Markets that set new records for luxury sales last year include:
- St. John's, Nfld.
- Quebec City
- Greater Toronto
- Hamilton-Burlington, Ont.
- Kitchener-Waterloo, Ont.
- London-St. Thomas, Ont.
Since the recession ended in 2009, sales grew a whopping 288 per cent in Regina, 219 per cent in St. John’s and 157 per cent in Saskatoon, all cities boosted by money coming in from the lucrative oil and gas industry.
Low interest rates have also spurred demand for housing in all areas of the market. Rising mortgage rates are also said to be sending buyers into the market as they look to take advantage of lower, pre-approved rates.
The luxury market is also being buoyed by an increase in equity markets that has padded the portfolio of many investors, particularly those with money in the U.S.
RE/MAX also pointed to the growing number of millionaires in Canada, up 6.5 per cent to 298,000 people in 2012 compared to a year earlier, citing the CapGemini report. Foreign investors are also helping to driven sales activity, particularly in markets such as Vancouver and Toronto.
RE/MAX says a reduced supply of single-family homes in big cities such as Toronto kept homebuyers active in the market.
While some argue all of this activity points to the frothiness of the Canadian market, RE/MAX sees it differently.
“Most purchasers remained grounded, especially at higher price points,” it stated in its report, “and the climate proved fundamentally healthy.”