Osoyoos Real Estate

Luxury home sales hold steady in most major markets across the country, says RE/MAX

Two-thirds of markets surveyed report upswing in the number of upper-end homes sold in 2008

Kelowna, BC (September 25, 2008) --  Luxury home sales have outperformed virtually all other residential price points this year, but activity in the top-end is expected to taper in most major Canadian centres in coming months, according to a report released today by RE/MAX.

The RE/MAX Upper-End Report, which highlights trends and developments in 15 housing markets across the country for the first seven months of 2008 found Vancouver, Victoria, Regina, Saskatoon, Winnipeg, London, Kitchener-Waterloo, Ottawa, Halifax-Dartmouth, and St. John’s all experienced an upswing in sales activity, while declines were noted in Kelowna, Calgary, Edmonton, Hamilton-Burlington, and Toronto. Also significant is in all but two markets, percentage increases in sales were greatest in the upper-end when compared to the overall residential marketplace in 2008.

“In two-thirds of the markets we surveyed, demand for upscale homes surpassed peak levels reported last year,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada .  “However, with supply edging higher in most major centres and few markets reporting tight inventory levels, we are seeing a return to more balanced conditions.  This situation is expected to have an impact on high-end values in coming months, especially in areas that have experienced consistent double-digit growth.”

Although the top-end of the market represents less than five per cent of total sales, activity is generally a gauge of overall market conditions.  Leading the country in terms of percentage increase in luxury home sales are Regina (up 306 per cent); Winnipeg (up 89 per cent); St. John’s (up 78 per cent); Saskatoon (up 72 per cent); Kitchener-Waterloo (up 47 per cent); Ottawa (up 36 per cent); Halifax-Dartmouth (up 20 per cent); London (up 14 per cent); Greater Vancouver (up five per cent); and Victoria (up four per cent). Solid performance is likely a result of consumer confidence, particularly in provinces like Saskatchewan, Manitoba, Newfoundland, Nova Scotia, and parts of Ontario where solid economic fundamentals helped to bolster the number of homes sold in the upper-end. 

“Given the transition occurring in most residential real estate markets, upper-end sales remain exceptionally strong,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.  “The market for luxury homes is usually the first to show pressure cracks, but the reverse is actually true this year, with pent-up demand (due to trade-up activity), less speculation, and job transfers all factors contributing to stability in this segment.  That being said, we feel uncertainty in financial markets both here and abroad will give purchasers cause for concern in the immediate future.”

The RE/MAX Upper-End Report also notes serious appreciation in housing values in recent years has pushed upper-end price points to new levels.  This is especially so in Western Canada where $2 million is now merely a starting price in Greater Vancouver, while in the tony Westside, that figure is closer to $4 million. Calgary is steady at $1 million this year, but is pushing closer to the $1.5 million benchmark.  In Ottawa , where the upper-end price point is currently pegged at $750,000, sales are increasingly occurring over the $1 million mark.

§         The priciest condominium currently listed for sale on MLS is priced at $14.8 million in Greater Vancouver – reduced from $18 million earlier this year.