Canada's luxury home market on a clear, upward trajectory, marked by record sales in most major centres in 2013, says RE/MAX

Accelerated demand pushing five-year growth rates into double and triple-digit territory

MISSISSAUGA, ON, Jan. 28, 2014 /CNW/ - Significant gains at the top end of the country's housing market continued to demonstrate the overall strength of Canadian real estate in 2013, according to a report released today by RE/MAX. 

The RE/MAX Upper End Report, highlighting trends and developments in 16 major Canadian centres, revealed that:

  • Seventy-five per cent of markets experienced year-over-year percentage increases in sales—including eight markets that posted double-digit gains.  Greater Vancouver led the charge with a 36 per cent increase in luxury sales last year, followed by Calgary at 34 per cent, Edmonton at 32 per cent, Hamilton-Burlington at 31 per cent, Kitchener-Waterloo at 27 per cent, Winnipeg at 26 per cent, Greater Toronto at 18 per cent, and Saskatoon at 15 per cent.
  • Over two-thirds of markets set new records for high-end sales in 2013.  Markets included St. John's, Quebec City, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Winnipeg, Regina, Saskatoon, Edmonton, and Calgary.
  • Luxury sales have close to quadrupled since 2009 in Regina (up 288 per cent), tripled in St. John's (219 per cent), and more than doubled in Winnipeg (189 per cent), Hamilton-Burlington (173 per cent), Saskatoon (157 per cent), the Greater Toronto Area (147 per cent), Greater Vancouver (125 per cent), and Calgary (115 per cent).  London-St. Thomas was up 90 per cent, Ottawa increased 86 per cent, Edmonton rose 81 per cent, while Quebec City jumped 76 per cent and Montreal climbed 61 per cent in the five-year period.

"Canada's luxury housing market has undergone serious transformation in recent years, setting a new standard for lifestyles of the rich and famous," says Gurinder Sandhu, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.  "High-end homes are commanding top dollar in blue chip neighbourhoods from coast to coast.  Condominiums are hitting price points that rival single-detached homes. The market is maturing and the appetite is unprecedented."

Last year's relatively low interest rate environment, substantial equity gains in Canadian real estate markets, stellar performance in US equities, and improving economic conditions contributed to the upswing in luxury home sales, driving close to 70 per cent of Canadian markets to new heights in 2013.

Diminished supply of single-family homes—particularly in markets like the Greater Toronto Area and Greater Vancouver—contributed to steady homebuying activity, as pent-up demand persisted.  Yet, most purchasers remained grounded, especially at higher price points, and the climate proved fundamentally healthy. 

Greater Vancouver experienced the largest bounce back in 2013, with sales of luxury homes posting the second highest level on record.  Western Canada claimed the country's top three high-end markets in 2013.  Ontario continued to demonstrate strength in the upper end, especially in Hamilton-Burlington and Kitchener-Waterloo.  Canada's largest real estate market—the GTA—also reported healthy activity in 2013.  Quebec held its own, with luxury sales outperforming overall residential market activity in both Greater Montreal and Quebec City.  Atlantic Canada experienced solid demand in St. John's, where upper end sales were up, but posted a decline in Halifax-Dartmouth.

 

UPPER-END RESIDENTIAL SALES - January 1 to December 31

 

 

Market

Price Point

Sales '09

Sales '10

Sales '11

Sales '12

Sales '13

% +/-

St. John's

$500,000

54

86

115

161

172

7%

Halifax-Dartmouth

$500,000

181

205

291

299

268

-10%

Quebec City

$500,000

116

150

150

196

204

4%

Greater Montréal

$1 million

251

330

406

436

405

-7%

Ottawa 

$750,000

210

244

360

392

390

-1%

Greater Toronto

$1.5 million

774

1069

1391

1617

1908

18%

   - Oakville

$1.5 million

74

74

95

131

156

19%

Hamilton-Burlington

$750,000

160

194

249

334

436

31%

Kitchener-Waterloo

$750,000

n/a

81

86

83

105

27%

London-St. Thomas

$500,000

107

167

185

194

203

5%

Winnipeg 

$500,000

152

290

359

349

439

26%

Regina

$500,000

80

127

198

303

310

2%

Saskatoon

$500,000

197

232

332

440

507

15%

Edmonton 

$750,000

202

248

220

277

365

32%

Calgary 

$1 million

340

367

447

548

732

34%

Greater Vancouver    

$2 million

715

1008

1880

1184

1609

36%

Victoria 

$1 million

219

240

229

227

200

-12%

Source: RE/MAX, Local Real Estate Boards

The surge in high-end homebuying activity dovetails with growing strength in global markets, including London (where sales of homes priced in excess of $8 million are up 24 per cent), and the US, where sales at high end of the market—homes priced at $1 million or more—are selling at nearly triple the pace of everything else. 

"Canada offers up some world-class real estate at affordable prices and, as such, we should see continued upward pressure on both sales and values in the years ahead," says Sandhu.  "Certainly, that has been the experience south of the border where prices for luxury product have climbed as high as $90 million for a penthouse in New York City.  By comparison, Canada's priciest sales in 2013 included a $25 million condominium and an $18.6 million compound offering mountain and water views in Greater Vancouver, a smaller version of France's Palace of Versailles in the Greater Toronto Area that moved at just over $13.4 million, and an $11.1 million estate in Calgary.  Given the prices commanded in other global centres, it's clear that there is still room for growth in Canadian real estate markets."

Local purchasers continue to be the primary drivers in the upper end of the market, as Canadian affluence climbs.   The ranks of Canadian millionaires are growing—up approximately 6.5 per cent to 298,000 individuals in 2012 (over 2011)—and with it, the undeniable appeal of bricks and mortar.  The CapGemini report also found that Canadian wealth expanded to $897 billion in 2012—with investment in equities and real estate contributing to the upswing in growth.  Some foreign investment was also noted in 2013, most prevalent in markets such as Greater Vancouver and the Greater Toronto Area. 

"Improving economic fundamentals will continue to support confidence among Canada's high-end home purchasers, buoying overall intentions moving forward," explains Sandhu.  "In the meantime, strength demonstrated at the upper-end remains a positive indicator of the real estate sector's broader health." 

To view the full RE/MAX Upper End Market Trends Report, click here: http://rem.ax/1i4zGx7

About the RE/MAX Network
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 90,000 agents provide RE/MAX a global reach of more than 90 countries. RE/MAX is Canada's leading real estate organization with approximately 19,000 sales associates and 750 independently-owned and operated offices nationwide. RE/MAX, LLC, one of the world's leading franchisors of real estate brokerage services, is a subsidiary of RE/MAX Holdings, Inc. (NYSE:RMAX). For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.ca.

About Integra Enterprises and RE/MAX Ontario-Atlantic Canada
RE/MAX INTEGRA is privately owned by Canadian entrepreneurs and represents nearly a third of all RE/MAX agents worldwide. Our Ontario-Atlantic region is driving towards 10,000 quality agents.  Our US regions—New England, Minnesota and Wisconsin and Indiana—account for over 6,000 agents, and Europe and the Middle East account for more than 12,000 agents. 

Forward Looking Statements
This press release includes "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "intend", "expect", "estimate", "plan", "outlook", "poised," "should" and "project" and other similar words and expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements. Such risks include, without limitation, those described in the sections "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation in RE/MAX Holdings Inc.'s registration statement on Form S-1 filed with the United States Securities and Exchange Commission ("SEC") and (1) changes in business and economic activity in general, (2) changes in the real estate market, including changes due to interest rates and availability of financing,  and (3) changes in laws and regulations that may affect our business or the real estate market. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, RE/MAX Holdings Inc. does not intend, and undertakes no duty, to update this information to reflect future events or circumstances. Investors are referred to in RE/MAX Holding Inc.'s registration statement on Form S-1 and subsequent reports filed with the SEC.

Data Source:  Historical data is sourced from Local Real Estate Boards.  Estimates and forecasts are based on the opinion of independent RE/MAX broker/owners and affiliates.

SOURCE RE/MAX Ontario-Atlantic Canada

For further information: Shelby Schneider, RE/MAX Ontario-Atlantic Canada, 905.542.2400; Eva Blay/Charlene McAdam, Point Blank Communications, 416.781.3911