Two major demographics are mainly responsible for the current strength of the Canadian luxury condo sector, according to the 2018 RE/MAX Spotlight on Luxury Report.
“Many Canadian Baby Boomers saw the strength of the real estate market over the past two years as an opportunity to cash-in, downsize and upgrade into the luxury market for retirement,” according to Christopher Alexander, executive vice president and regional director of RE/MAX INTEGRA Ontario-Atlantic Canada Region
“We’re also seeing an emerging trend of Millennials entering the lower end of the luxury condo market, as they tap into their inheritance to invest in this popular property segment,” he stated.
Read more: Despite market prominence, ownership remains elusive for millennials
Toronto and Vancouver condos priced at $1-2 million price range have sustained its healthy share of buyers over the past few years. Toronto luxury sales rose by 2% year-over-year, while Vancouver had a 6% increase.
“Local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties,” RE/MAX of Western Canada executive vice president Elton Ash said, adding that overseas investors are shying away from the single-detached sector.
“The foreign buyers’ tax has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market.”
Luxury single-detached sales went down by 37% year-over-year in Toronto, and 31% in Vancouver.