In Sydney, there are two narratives at play in the real estate market. While soaring interest rates are immobilizing many buyers across the general market, cash buyers in the top price points are staying active amid a lack of luxury inventory.
Throughout 2022, Sydney saw the most significant annual price falls among all of Australia’s capital cities, with home values dropping 12.1%, according to CoreLogic data. However, the prestigious end of town had a different experience. Prices across the city’s prime market—defined as the top 5% in terms of home values—actually increased in 2022, although modestly, by 1.1% according to Knight Frank’s 2023 Wealth Report.
Australia’s Wealth on the Rise
Industry insiders attribute the buoyant nature of Sydney’s priciest properties to the sector’s relative immunity to interest rate movements. Erin van Tuil, Knight Frank Australia’s head of residential, said the country has a larger than average proportion of high-end cash buyers.
“In our Wealth Report we said 49% of prime market buyers internationally were cash purchasers,” she said. “In Australia, we think that’s probably closer to 60% according to our research. Much of that is attributed to capital appreciation, money that’s sitting in people’s properties they already own.
“There’s definitely less impact from interest rates in the prime market, that’s why it’s behaving differently. Although we don’t have the data on cash buyers for Sydney specifically, we do know that typically 25% of our ultra-high-net-worth population lives in Sydney,” Ms. van Tuil added.
Knight Frank puts Australia’s population of ultra-high-net-worth individuals (residents with a personal net worth of more than US$30 million) at 20,874 people, up by 10.1% in 2021 alone.
The firm is forecasting Australia’s affluent headcount will grow a further 30.9% by the middle of the decade.
Low supply of prestige property is also behind the luxury market’s unique resilience as wealthy homeowners don’t want to—or don’t need to—sell.
“Stock at the moment is definitely tightly held. There’s less stock on the market, which then is also contributing to the prices of prime property outperforming what’s happening in the mainstream,” Ms. van Tuil explained.
A Safe Haven
The number of cashed-up foreign buyers and returning expats purchasing in Australia is rising, according to Sydney-based Monika Tu, founder and principal of Black Diamondz, a luxury property brokerage. She said approximately 70% of her deals are cash, with the pool of buyers looking for homes valued at A$25 million and up are currently “very active.”
“Many buyers are coming from China, Hong Kong, Singapore and Vietnam,” Ms. Tu said. “What’s happening internationally is overwhelming, there’s so much uncertainty, but Australia is still favored with South East Asian and Chinese buyers because it’s a relatively stable market. And when we compare square meters of prestige property we’re so much cheaper.”
According to the Wealth Report’s relative values comparison list, which charts how many square meters of prime property US$1 million buys in select cities, Sydney ranks 10th.
Ms. Tu said prime market purchasers are able to weather almost any storm, which in turn impacts the traditional trends of supply and demand.
“In Sydney’s wealthy suburbs, these people don’t have to sell. If you don’t have to sell you can hold on through recessions, interest rate increases, it doesn’t matter. But demand is always there and the demand from overseas is overwhelming,” she added.
Beyond rising interest rates, there are other factors influencing prestige buyers, said Sotheby’s Sydney International director Michael Pallier.
“This end of the market is often more affected by the stock market and where the Australian dollar is. We’ve got a lot of migration coming into Australia and our dollar is pretty attractive right now for overseas buyers,” he said, referencing the fact that US$1 equals approximately A$1.47.
While global events are front of mind for prime market buyers, Mr. Pallier explained that these purchasers are still astute business people with an eye for the right deal.
“People are looking at the news every day to see what’s going on around the world and these are very uncertain times. So people are cautious but for good quality properties, especially with the current lack of stock availability, there’s still plenty of people buying,” he said.
“I’m finding at the moment that for many of these buyers, it’s more the fear of not getting the property that makes them go for it. I recently sold an apartment for A$8.25 million with a three-day settlement, all cash. When the buyer exchanged contracts instead of giving me a 10% deposit he transferred 100% into our trust account. When I rang to ask why, he simply said to me ‘I thought it was just easier.’ So there are definitely plenty of cash buyers about.”
A Domestic Domino Effect
Gavin Rubinstein, director of real estate agency TRG, said while foreign buyers are looking fondly on Sydney real estate, plenty of wealthy Australians are also house hunting.
“It’s a combination of locals and expats still coming back after the pandemic. There’s been a couple of really good sales I’ve done with people who’ve returned to Sydney who seem to be pretty cashed up,” he said, adding he’d transacted at least a dozen multimillion dollar all-cash sales this year alone. “My view is the market has been fuelling the market. One client gets a big price for their house, then they take that cash and buy the next house.”
Then there are the wealthy locals who rode the very lucrative real estate wave that swept through Sydney in 2021.
“A lot of people made a lot of money over the last couple of couple of years. Whether it was refinancing, revaluing, drawing equity—everyone’s assets grew astronomically by about 30%, 40%, in some cases by as much as 50%. That’s another major factor that’s contributing to the amount of cash buyers out there—it was the biggest boom we’ve ever seen in the history of property,” Mr. Rubinstein said.
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.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
