Luxury segment fluctuating in GTA, Victoria and Vancouver
Luxury segment fluctuating across Canada
Neil Sharma
REP
While the luxury market is in flux throughout the country, sales are red hot in the GTA.
According to a RE/MAX report, luxury condo sales in the GTA are up a whopping 85% year-over-year between January and July in 2017, with Oakville solidifying its place as one of the region’s most exclusive areas. Victoria, B.C. and Calgary also boosts, but Vancouver’s luxury single-family detached home sales dropped 32%, in spite of its luxury condo market getting an 11% bump.
The same report speculates that the foreign buyer tax likely played the biggest role in cooling Vancouver’s single-family detached market.
According to Christopher Alexander, Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region, industry insiders have been waiting baby boomers to begin downsizing en masse, and it would appear that they finally have.
In addition to the short supply of detached housing in the GTA, Alexander said the “main two reasons (for the year-over-year rise in condo sales) are baby boomers are finally starting to downsize and developers aren’t building that many large units, so it’s contributed to price appreciation.”
He added that boomers appear to be moving downtown in droves.
“A lot of these people made a fortune on their homes,” said Alexander. “Baby boomers are pretty sophisticated. They like theatre and going to sports games. Toronto in general is where there’s been a big influx of boomers downsizing and moving into condos.”
Condominiums aren’t especially spacious in the GTA, and with a shortage of single-family detached homes, in addition to their exorbitant price tags, many people are purchasing larger, luxurious condos.
“Condos are a more affordable option than houses, and if you want to be in a prime neighbourhood, condos are always less expensive than houses,” continued Alexander. “If you want to be in Rosedale, $2-3 million doesn’t get you a lot of house, but it gets you a hell of a lot of condo. Inventory is still tight and the Fair Housing Plan has made inventory low for single-family detached, so despite the big price tag, luxury condos are still a more affordable option.”
Alexander added that high GDP and immigration, in addition to considerable equity and buying power in the GTA, have created ideal market conditions.
Recently reeling from misfortune in the oil sector, Calgary’s luxury market is recovering nicely. According to sales agent Patrick Murray of Coldwell Banker Mountain Central, the $700,000 to $1 million market outpaced the $600-699,000. The former saw 1,244 sales in 2017 as of the end of August, while the latter segment had 1,233 sales.
“Some of the builders we chat with are also noticing differences, saying that the old million dollars isn’t the old one million, it’s $1.2 million,” said Murray. “When things started going south initially, we saw a slowdown in the luxury market and a sharp adjustment in prices, however, we’ve seen with Calgary that we’re certainly in a recovery.”
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