Demand for luxury homes intensifies amid rising Canadian and global wealth
By Nelson Daily Staff
A wealthier upper class is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released Wednesday by RE/MAX.
RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between Jan. 1 and April 30 of this year, compared to the same period in 2010.
Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent) — where foreign investment has also played a major role — Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent).
Six of the seven major cities — with the exception of Calgary — are poised to set new records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.
While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver. The vast majority of regions reported that locals were the primary drivers of demand for luxury product.
The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again — a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics — to name a few.
While estimates vary, the studies concluded that the high net worth population in Canada and abroad — and its corresponding fortunes — is trending upward and will experience considerable expansion moving forward.
Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios and assets have improved or exceed pre-downturn levels. Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets.
