Luxury homes sales not only recovered from recessionary depths in the first quarter of this year, ReMax Canada said they shattered previous all-time records in most Canadian cities studied.
Attributing the upswing in sales to "improved economic performance, increased personal wealth, immigration and foreign investment" in its Upper End Market Trends report, ReMax Canada said previous sales records for high-end homes broke records in nine of the 13 regions examined.
The real estate sales company didn't provide statistics to back up the reasons for the bounce in sales, but did allow that the comparisons to last year's first quarter are flattering because very few people were buying and selling through the recession.
Enter your text here ...ReMax's definition of a luxury home varies by market, from $400,000 in St. John's to $2-million in Greater Vancouver. The amount is usually arrived at by looking at the top 1-to-5 per cent of sales in any given market.
Those who returned to the market in the first quarter were able to take their time making up their minds because the market is balanced, ReMax said. This contrasts with the broader market, where analysts worry that low interest rates have created an unsustainable bubble as buyers rush to get in on what they see as a market with limited downside.
This has led to a rapid increase in average national sale prices - almost 20 per cent in the last year - as buyers bid each other higher in bidding wars. The market survey doesn't mention anything about the rapid rise in prices, and the role the appreciation may have played in pushing more homes into so-called luxury territory.
In Vancouver, for example, the average price for a home hit $1-million in March, including high-end offerings. Even without accounting for more expensive properties, prices are at historic highs - a single, standard detached home averaged $800,341, the Real Estate Board of Greater Vancouver said, up from $650,000 a year ago.
If interest rates were to rise quickly, economists worry many could find their payments increase to unsustainable levels.
"With the exception of Toronto, buyers could be relatively particular and take their time in making decisions as balanced conditions characterized markets across the board," ReMax stated. "Given adequate supply, prices are likely to hold steady or experience modest increases in the majority of markets in 2010."
From the survey:
A luxury home was most expensive in Greater Vancouver at $2-million, followed by $1.5-million in Greater Toronto and Montreal Island.
Upper-end markets were most abundant in Atlantic Canada and smaller centres in Ontario, where luxury home prices started at $400,000 in St. John's, $450,000 in Halifax-Dartmouth, $500,000 in London St. Thomas, and $750,000 in Ottawa and Hamilton-Burlington.
Winnipeg and Edmonton saw the luxury market around $500,000 and $850,000 respectively.
The most expensive house sold in Canada in the first quarter, according to the Multiple Listing Service managed by the Canadian Real Estate Association, was in Vancouver's west side, selling for $10-million. The house is on 3/4 of an acre, and is 11,600 square feet.
"While comparisons are being made to one of the worst first quarters on record – it's important to note that the bounce back in many areas including Greater Vancouver, Victoria, Winnipeg, London-St.Thomas, Greater Toronto, Ottawa, Montreal (Island), Halifax-Dartmouth, and St. John's - exceeds record levels reported in years past," ReMax stated.
Steve Ladurantaye - Globe and Mail