While home sales and prices continue to moderate and even fall in some parts of the country, a new report finds that demand for high-end housing is ahead of last year’s pace.
According to the Upper-End Report released by RE/MAX, 81 per cent (13) of the 16 major Canadian centres examined posted an increase in home buying activity in the first quarter of 2012, with the vast majority reporting double-digit appreciation.
Those centres seeing gains included Greater Montreal, Quebec City, Victoria, Edmonton, Calgary, Regina, Saskatoon, London-St. Thomas, Kitchener-Waterloo, Hamilton-Burlington, Greater Toronto, Ottawa, and Halifax-Dartmouth.
“While the ranks of the rich expand in both population and wealth, their impact on the Canadian residential landscape is undeniable,” said Michael Polzler, executive VP, RE/MAX Ontario-Atlantic Canada. “Their confidence abounds from coast-to-coast, irrespective of price point.”
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 (50 units vs. 32 units). Quebec City placed second, posting a 50 per cent (48 units vs. 32 units) upswing in activity, while Toronto followed closely with a 49 per cent gain (412 units vs. 277 units). The mid-sized markets of London-St. Thomas (43 per cent) and Kitchener-Waterloo (39 per cent) rounded out the Top Five—demonstrating that upper-end enthusiasm is not exclusive to Canada's larger centres.
According to Elton Ash, regional executive VP, RE/MAX of Western Canada, the stability real estate offers is still something high-end buyers appreciate.
“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,” he said.
The report also noted that although the top end of the market represents only a small proportion of overall residential sales, when measured in terms of dollar volume, luxury sales are a much larger part of the equation. As such, “the strong momentum out of the gate speaks to the overall confidence in real estate,” the report stated.