The forecast for Vancouver's high-end real estate market is positive for fall 2013. The precautionary mortgage lending restrictions introduced by the Bank of Canada in 2012 will no longer impact Vancouver's upper end real estate market. Sotheby's International Realty Canada experts anticipate the positive sales momentum from this summer to continue into the fall. With 955 of the 1,239 homes sold over $1 million in the first half of the year being single-family homes, single-family home sales are expected to lead the high-end market. Vancouver will continue to be supported by the influence of international buyers: according to Sotheby's International Realty Canada's Top Tier Trends study (April 2013) approximately 40% of buyers of luxury single family homes were from outside of Canada and this trend is anticipated into the fall. As in previous years, China will remain the top market influencer, along with Iran and the United States.
Despite a slower start to the year, the Greater Toronto Area (GTA) market has experienced a notable rebound that Sotheby's International Realty Canada experts believe will continue into the fall of 2013. The tightening supply of top-tier real estate, a tight rental market, as well as stable Bank of Canada interest rates, will be three of the main drivers. In spite of price increases, the average selling price of homes, including condos, has found consumer support at current levels. The latest Toronto Real Estate Board Affordability Index also reflects the fact that the average GTA household can comfortably afford monthly mortgage payments and that these payments are within the 39% maximum gross debt-service ratio (GDS) established by the federal government. In spite of negative industry predictions regarding the high-end condo market earlier in 2013, this market segment show signs of strength leading into the fall, with the number of condo resales increasing in the conventional and high end market compared to earlier this year.
A balance is anticipated for the high-end real estate market in fall 2013. Although Montreal's political climate has anecdotally had a dampening effect on the high-end real estate market, the city remains one of the most affordable and desirable cities in Canada. Furthermore, Montreal has led and will continue to lead the country in luxury real estate sales to international buyers. 50% to 60% of high-end homes now sell to foreign buyers, and experts believe that numbers will increase with strengthening demand from Asia and the Middle East. Single-family home sales over $1 million experienced notable and steady growth across the majority of price points in the first half of 2013, foreshadowing stability in this category. While Montreal's high-end condo market has experienced a softening in 2013, the positive sales momentum seen in condos in the $1-2 million range in the first half of the year is expected to continue. The international influence on the market for investment-friendly condos is also notable: foreign purchasers have been buying multiple units of 600 square foot condos in several new downtown developments, a recent and promising trend for the market.
To download the full reports on Canada's Luxury performance for the first half of 2013 and Luxury trends in Canadian Real Estate visit: To view the Top Tier Trends Report, please visit:
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About Sotheby's International Realty Canada
Combining the world's most prestigious real estate brand with local market knowledge and specialized marketing expertise, Sotheby's International Realty Canada is the leading real estate sales and marketing company for the country's most exceptional properties. With offices in over 25 residential and resort markets nationwide, our professional associates provide the highest caliber of real estate service, unrivaled local and international marketing solutions and a global affiliate sales network of approximately 600 offices in more than 45 countries to manage the real estate portfolios of discerning clients from around the world.
(i) The information contained in this report references market data from MLS boards across Canada. Sotheby's International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby's International Realty Canada or Sotheby's International Realty .
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