Luxury home market grows, but not in Ottawa.
September 19, 2005 - Sales of existing homes in the higher end of the price market are outpacing the growth of the overall market in most major cities, according to a report published by Royal LePage Real Estate Services. The report found that sales of high-end priced homes are growing at an unprecedented rate, with Toronto, Calgary and Winnipeg reporting sales increases of over 40 per cent, year-over-year, in the first two quarters of 2005.
"Increased sales of larger and more luxurious homes reflect the underlying strength of the Canadian economy, one that has demonstrated a strong performance and resilience throughout 2005 despite the strength of the Canadian dollar," said Phil Soper, President and CEO of Royal LePage Real Estate Services. "Through these purchases, many high net-worth individuals are expressing their ongoing confidence in both the economy and housing investments."
Soper said luxury buyers also initiate a significant amount of upgrades and renovations, adding to the equity in their homes.
In Toronto sales of homes priced at $1.5 million or more have increased 48 per cent, year-over-year, in the first six months of 2005 to an historical high of 288 units. During the same period in 2004 there were 195 unit sales. Sales in this price category have experienced the highest average year-over-year growth of all price categories since 1996, increasing at an average of 38 per cent every year.
In Calgary, sales of luxury homes in the first six months of the year have nearly tripled year-over-year, with 110 units sold compared to 37 in the same period 2004. This represents an increase of 197 per cent over 2004. In fact, more homes priced at $900,000 or more were sold during the first and second quarter of 2005 than during all of 2004.
Sales of properties in the high-end of the market in Winnipeg (homes priced $300,000+) have more than doubled to 168 units in the first six months of 2005, compared with 81 units sold during the same period in 2004. Unit sales in this price category have experienced 52 per cent average growth per year between 2002 and 2004 while the overall market average grew by four per cent.
Sales of homes priced at $1 million or more in Vancouver have increased by 18 per cent for the first six months of this year to 739 units from 627 in 2004. Between 1999 and 2004 sales in this price category have experienced the highest average growth at 32 per cent per year, while sales in the overall market grew at an average of 11 per cent per year.
The market activity involving luxury homes priced at $750,000 or more in Ottawa softened slightly to 40 during the first half of 2005 compared with 43 in the same period of 2004 (-7%). This comes after a period of strong growth between 2003 and 2004 when there was a 72 per cent increase in sales of this price category (36 units sold in 2003 versus 62 units sold in 2004).
© Canadian Real Estate Association 2005