high end of Canadian housing markets.
According to a report released today by RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada that examined 12 major centres12 cities from coast-to-coast and three sub-markets (Mississauga, Oakville and Richmond Hill/Thornhill) covered in the 2011 Upper End Report, indicate that luxury Homes sales have surged in close to two-thirds of housing markets for the first four months period of this year, compared to the same period in 2010.
With the exception of Calgary, by year-end, six of the seven major cities are poised to set new records in High-end activity. Most of the cities are just short of peak levels reported in 2010, such as Victoria, Regina.
RE/MAX said the Greater Vancouver Area led the way in terms of percentage increases over the four-month period in luxury-home sales, with 747 properties sold. That's an increase of 118 per cent from the 343 sold during the same period last year and the report said that foreign investment is helping to fuel the demand for sales activity in several Canadian markets.
Demand for luxury homes in the Toronto area increased by a more sedate nine per cent. Other cities where foreign investment has also played a major role that saw double-digit increases include Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), and Hamilton-Burlington (13 per cent). The vast majority of regions reported that locals were the primary drivers of demand for luxury product.
Other factors at play are improved home values, a recovery of the stock market and improved economic performance that continues to bolster the bottom line of high net worth individuals both nationally and globally, the report said.
A number of factors position Canada as an attractive option for Real Estate Investment, foremost that it’s Real Estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws compare to other countries, it’s the perfect mix.
The strength of the higher-end segment continues to defy expectations, in particular that demand remains largely domestic underpinnings the strength of the market, underscoring the appeal of Canadian real estate on an international stage to foreign investor.
The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions, to name a few: Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics.
Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels. While estimates vary, the studies concluded that the high net worth of individuals in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion.
With a clear preference for tangible assets, residential real estate holdings have increased among high net worth individuals. This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.
Supply will play an increasing role in the future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres. Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011; Infill, renovation and new construction are helping to some extent, while driving up prices in tandem.
The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.
Given that demand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.