Luxury Housing in Canada Booms on Foreign Demand, Low RatesKatia Dmitrieva
Demand for high-end real estate in Canada continues to rise as low mortgage rates and international buyers spur demand and boost prices for million-dollar homes.
Sales of houses valued at C$1 million ($936,680) and more in Toronto, Vancouver, Calgary and Montreal climbed 32 percent in the the first six months this year over the same period in 2013, according to a report released today by Sotheby’s International Realty Canada. Toronto, the country’s largest city, and Vancouver, the city with the highest selling price, each had a 34 jump in sales of the luxury homes.
“These are historically low interest rates and people are confident that they can afford borrowing with the equity in their homes,” Ross McCredie, chief executive officer of Sotheby’s International Realty Canada, said by phone from Vancouver. “People are realizing that a big chunk of their net worth is in real estate and they’re renovating to increase that. You also have a lot of wealthy international buyers. Canada’s seen as a stable and safe place to invest.”
Demand for higher-priced homes continues to rally as buyers take advantage of mortgage rates in Canada that have remained at a low 4.8 percent since May. Foreign interest in Canadian luxury housing will remain strong in its largest cities as the removal of the immigrant investor program failed to slow sales this year, the report said.
The program, which helped foreigners immigrate to Canada if they were worth at least C$1.6 million and would invest C$800,000 in the country, was terminated in February.
In Toronto, sales of all home types, including condominium units, townhomes, and houses, worth at least C$1 million climbed 34 percent to 3,956 in the six months ended June 30 from 2,947 last year. Vancouver, where the average home price is C$797,093 and rising each month, also experienced a 34 percent increase in sales to 1,664 homes purchased.
Sales of homes worth C$4 million or more hit a record this year, McCredie said, with 177 of them sold across Canada in the year to June.