RE/MAX says Saskatoon was Canada’s fastest-growing luxury real estate market in the first two months of 2024. THE CANADIAN PRESS/Kayle Neis (The Canadian Press)
RE/MAX Canada says luxury home sales are booming by double-digits across Canada, but remain below the COVID-19-era peak.
Saskatoon had Canada’s fastest-growing luxury market in the first two months of 2024, the realtor says in a new report released on Tuesday. With luxury real estate starting at $700,000, RE/MAX says sales climbed more than 57 per cent versus 2023 due to a healthy economy, plus an influx of new Canadians and out-of-province buyers.
RE/MAX classifies homes that are twice the average residential price as luxury.
In Montreal, where luxury real estate starts at $2.5 million, sales grew 56 per cent. In Toronto and Vancouver, where luxury inventory costs north of $3 million, sales rose 14 per cent and three per cent, respectively.
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“The upswing in luxury sales signal a return to overall health in the country’s major centers,” RE/MAX Canada president Christopher Alexander states in the report. “The ripple effect is already underway, with stronger home-buying activity at lower price points pushing sales into the upper end.”
Ottawa was the only city included in the report to book a decrease in luxury real estate sales. The number of transactions there fell eight per cent versus the first two months of 2023. RE/MAX says fewer homes in the nation’s capital were listed for sale at the top of the market early this year.
Nationwide, RE/MAX says strong equity gains, lower overall values, and downward-trending interest rates are supporting demand for luxury homes.
“Equity continues to play a significant role in the marketplace, driving demand at the top end of the market,” Alexander added. “Although overall gains have been elusive in recent years, a good percentage of buyers who purchased in 2018 and 2019 are well positioned to make their next moves.”
For example, RE/MAX estimates someone who purchased a home in the Greater Toronto Area in 2018 at an average price saw the value of their investment climb nearly 43 per cent by the end of 2023.
Foreign buyer activity falls
RE/MAX says the federal government’s ban on foreign ownership of Canadian real estate has had a “palpable” impact on the uber-luxe segment of major markets, as activity dropped “dramatically.” These markets include Metro Vancouver and Toronto, as well as the condo market in Montreal.
“While the idea of a Foreign Buyer Ban sounds good in principle, it makes less sense in practice,” Alexander states. “The ban was originally intended to make a greater number of properties available to Canadians, and reduce upward pressure on housing values. The Bank of Canada’s 10 rate hikes were all that was needed to achieve that objective, all the while supply remains at historical lows.”
Young money
Luxury home-buying is skewing younger, according to RE/MAX. In Saskatoon, the report says young professionals working in the oil and gas industry are buying properties with acreage on the outskirts of urban areas. In larger cities, luxury condos are a popular choice.
RE/MAX say the luxury condo market is strongest in Metro Vancouver. Condo sales in that city climbed nearly 70 per cent in the first two months of 2024, according to the report.
Looking ahead, Alexander calls for thriving luxury real estate markets from coast-to-coast, barring an economic sea-change.
“Assuming a continuation of current economic fundamentals, momentum is set to climb at luxury price points,” he states.
“Demand is coming from a mix of high-income professionals/executives, retirees, empty-nesters, Gen X and millennials, newly landed immigrants, as well as large and multigenerational families – a good sign, as the diversity of buyers at the top end of the market today bodes well for its overall health in the future.”
Last month, a report by Royal LePage called for resurgent demand in Canada’s recreational housing market, following a post-pandemic slowdown in sales.
“Fundamental demand for recreational living has not abated,” said Royal LePage CEO Phil Soper. “Demand has been building quietly on the sidelines.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
