Posted 2.14.14 @ 11:30
Last year sales of luxury homes soared in a record 3/4 of the country - but why? Could it be the stock market hitting new highs (even though the Loonie has dropped in value), the fact that consumer confidence has resurged and that new construction is finally catching up with demand?
Whatever the reason, Canada’s luxury market is booming and in some of the most unexpected places. Even London, Hamilton and other cities have seen a boost in luxury sales and construction. Vancouver, which had seen a large slump between late 2011 through early 2013 was the smash hit of the year, with an increase of almost 40% for 2013.
Who’s Afraid of Conspicuous Consumption?
During the recession consumer confidence was at an all-time low - and with so many losing their jobs and their homes across the world, no one wanted to be “that guy”.
You know, the one buy the $140m Bond Villain Bungalow on the shore.
But now that the global economy is recovering and business is booming, greed suddenly isn’t so bad. In Vancouver alone there were over 1,600 homes sold for over $2 million - one of them was Canada’s most expensive condo property, a $25 million penthouse at the top of the infamous Fairmont Pacific Rim hotel.
Calgary, another hot city in luxury listings last year, had a 34% surge in luxury sales; Edmonton and Hamilton tied at 32%, with Kitchener beating out Toronto’s 18% jump with a 27% lead in luxury sales on its own.
Luxury Homes Harder to Sell
What passes for luxury varies from city to city, and a luxury home can sit on the market for a lot longer than a “normal” house - even worse, many sell for well below listing price, especially since luxury buyers tend to have much more latitude than their conventional real estate cousins.
But again, luxury changes from city to city; for example, a home in London listed at $500,000 is considered a luxury estate, while a home in Toronto listed at $500,000 is an insane bargain. That same home would probably list in the GTA for $1.5m at least - but like everything else, it’s about location, location, location and what people are willing to pay.
But either way, the demand for “showcase” homes continues to rise and inventory remains in short supply. Even with luxury home construction underway on thousands of properties across the country, it could be years before supply catches up with demand.
Foreign Investment at a Fever Pitch
Foreign interest and investment in Canada’s luxury home market remains at a fever pitch; Toronto, one of the world’s hottest “global cities”, is excellent proof that with rising stock markets and consumer confidence just about anything is possible - at least when it comes to real estate.
This year alone the amount of millionaires around the world stands at 12 million, which means there are plenty of people willing to invest in real estate. Who knows what 2014 and beyond will hold? What we know for sure is that the sky very may well be the limit for Canada’s luxury real estate market.
To view our great selection of luxury homes in the Oakville area, click here.