Luxury Home Sales Soar as Foreigners Bet on Canada

  • Sales of homes worth C$3 million+ up 61% in Toronto: report
  • Calgary moves in opposite direction as oil's slump weighs

Sales of the most expensive luxury homes surged in Toronto in the first seven months of the year, fueled by foreign demand for housing in Canada’s largest city, according to Re/Max Holdings Inc. and Re/Max Integra.

Sales of houses and condos worth at least C$3 million ($2.3 million) jumped to 279 units in Toronto from January 1 to July 31 this year, up 61 percent from the same period the year before, Re/Max said in a report. Vancouver sales rose 72 percent to 572 units, leading gains in the C$3 million-plus category among cities including Montreal, Oakville and Victoria.

“Foreign buyers have continued to drive demand in the Vancouver and Toronto luxury markets,” the report said. Primarily Chinese families with children, the buyers choose “Canada for its stable economy and high quality of life, and their real estate decisions are strongly influenced by proximity to good schools.” Purchases are also driven by local professionals looking to upgrade.

The desire to live in a large, downtown home met with limited supply. Homes worth more than C$3 million sold at a faster clip than those above the C$1 million mark in Toronto and Vancouver, the report said.

Calgary, heart of Canada’s oil industry, was the only city with a decline in luxury home sales. Transactions of homes worth more than C$1 million fell 28 percent to 517 units in the first half of the year from the same period a year ago as oil prices slumped.

Asian investors are benefiting as the Chinese currency has strengthened 11 percent against the loonie this year. Meanwhile, Canada’s economy is in the midst of a technical recession, with gross domestic product contracting for a second straight quarter, Statistics Canada said today.

RE/Max Holdings Inc. is the Denver, Colorado franchiser of real estate brokerages. Re/Max Integra is a closely held company with offices in Ontario and the Atlantic Canada, among other regions.

(Company corrects number of Toronto luxury homes sold in second paragraph.)
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