Sotheby’s International Realty Canada predicts that sales of homes worth over $1 million will rise in Toronto and Vancouver, while Montreal's luxury market should be balanced and Calgary’s will slow due to the effects of declining crude prices.
Sotheby's says sales gains are expected to be highest in the over-$4 million category in the Toronto and Vancouver areas this fall, although higher sales volumes are expected in the $1-million to $4-million range, as well.
The company lists increased demand from international investors alongside limited inventory, historically low interest rates and heightened consumer confidence as the factors expected to fuel sales growth in Canada’s two hottest real estate markets.
According to veteran agent Sarah Daniels of Bay Realty Ltd., “$4 million will get a nice house, but not necessarily a large lot,” something Chinese buyers desire along with good schools.
The former co-host of HGTV Canada’s “Urban Suburban” says five years ago there was an influx of foreign buyers, snatching up the larger properties in her main territory of South Surrey/White Rock.
“It put pressure on the smaller homes, which became like a game of musical chairs,” she says. “People were afraid to sell because there is nothing to buy.”
What’s happening in the current market is that people trying to move up are finding themselves in bidding wars, especially in the $2 million to $2.5 million range.
“These homes move at a pretty good clip, especially if they’ve been upgraded,” says Daniels. “These older homes are where you often get the bidding wars pitting developers against those who want to renovate the property.”
Turmoil on the Chinese stock market may continue to boost the luxury home resale market, says one realty company, particularly in Vancouver and Toronto, making for a busy fall season for agents.