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Wealthy Canadians shacked up in more million dollar homes in pricy urban markets in the first half of 2014 than in the same period a year ago, according to a new study from Sotheby’s International Realty Canada.
Vancouver and Toronto dominated the nation’s luxury property sales growth as both markets saw 34 percent increases. Calgary and Montreal climbed 17 percent and 11 percent respectively. The Greater Toronto Area (GTA) was the only region that saw gains in all housing segments.
“With the country experiencing positive economic gains and lending conditions remaining favourable, we expect Canada’s high-end housing market to see consistent growth through to early 2015,” said Ross McCredie, president and CEO of Sotheby’s International Realty Canada in a statement.
The study credits low interest rates, positive economic and employment growth, as well as high consumer demand and low inventory for the across the board gains.
Sotheby’s pegs the GTA as the leader in Canadian high-end real estate. July luxury home numbers came in among the strongest for the year. The most significant sales numbers were at the $1.2 to $1.5 million price point. Homes above $2 million trumped those between $1.5 million to $1.75 million. The study predicts a seller’s market into the fall driven by tight inventory and high demand, a trend that will put pressure on the condo market as buyers are priced out of homes.
Like Toronto, Vancouver luxury home sales benefitted from low interest rates, high consumer confidence, and a favourable economy. The biggest jump occurred in the highly sought after detached single-family home segment, which was up 38 percent. Attached housing got a boost from low inventory in the detached home market as buyers hunted for alternatives.
Calgary’s robust energy driven economy lead the nation in 2013 and 2014, but Sotheby’s predicts a more balanced end to 2014 following a year of bidding wars and price increases. This summer saw an infusion of high dollar properties, particularly in the condo market, to meet ongoing demand. Calgary saw notable growth in the $4 million single-home segment that is expected to last through the fall and into 2015.
Sotheby’s expects Montreal to remain balanced due to the city's perceived return to political and economic stability following the spring election of a Liberal provincial government, with the majority of sales occurring in the $1 million to $2 million dollar single family market.