Prices of luxury homes in the main cities of Eastern Canada rose during the past year while they fell in Western Canada, in part reflecting regional disparities and overheated markets, according to real estate company Royal LePage.
Limited supply in high demand areas such as Greater Montreal drove the median price of a detached luxury home there by 8.5 per cent over the 12 months to Jan. 31 to $1.85 million. The corresponding amount was a 1.2 per cent gain in Greater Toronto to $3.63 million and a 6.7 per cent drop in Vancouver to $5.39 million.
In Montreal, demand remains steady for areas such as the West Island and neighbourhoods such as Westmount and Outremont, while “there has been a surge of demand for luxury properties in surrounding neighbourhoods such as Le Plateau and Griffintown,” Marie-Yvonne Paint of Royal LePage Heritage said in a statement.
Royal LePage said it expects luxury house prices in Vancouver to decline a further 2 per cent over the next year to a median of $5.29 million as the market stabilizes. House prices in the region declined over the past year and a half as government measures to discourage foreign investors and tighten mortgage rules in Canada’s hottest real estate market took hold.
Luxury homes are defined as costing more than three times the median price of a property. The corresponding threshold amounts for a detached luxury home are $3.15 million for Toronto, $1.32 million for Montreal, $4.34 million in Vancouver, $1.63 million in Calgary and $1.51 million in Ottawa.
In Calgary, the dire energy economy continued to bite with a 0.8 per cent decline in the median price of a luxury home to $1.95 million over the past year, the property company said. Many homeowners are waiting for the market to rebound before listing, and the limited supply has reduced the price decline, Royal LePage said. The outlook is for a 0.5 per cent decrease in the median price of a luxury home to $1.94 million, it said.
It could be an opening for Calgary buyers, said John Hripko, an agent at Royal LePage Benchmark. “We are seeing buyers who were priced out of the luxury market in previous years buy their dream home,” Hripko said. “The opportunity for those trading up within the luxury segment is unprecedented.”
The median price for a luxury home in Ottawa rose 2.7 per cent during the period to $1.85 million in part driven by demand from executives in the IT and public sectors and those seeking quality of life, the agency reported. The forecast for this year is a 2.5 per cent increase to $1.9 million, it said.
“Neighbourhoods where inventory is low and demand is high for luxury homes include Westboro and the Glebe,” Charles Sezlik, sales representative at Royal LePage Team Realty, said in the statement. “Of course, Rockcliffe Park remains the number one destination for buyers looking for upper-end luxury homes centrally located.”
The performance of the luxury condominium market largely mirrored detached dwellings, although the median price of a luxury condo in Toronto jumped 7 per cent to $2.4 million during the period, Royal LePage said.
“Boomers and young executives looking for low maintenance, luxury property are competing against investors and foreign buyers also seeking a low maintenance property to use as a secondary residence,” said Steven Green, a sales representative at Royal LePage Partners Realty.
Elsewhere, the corresponding price bounded 8.3 per cent in Montreal and rose 2.2 per cent in Ottawa, while it dropped 4.4 per cent in Vancouver and 2 per cent in Calgary, the agency said.
Condos are considered luxury when they’re valued at more than $1.68 million in Toronto, $1.05 million in Montreal, $1.88 million in Vancouver, $834,000 in Calgary and $909,000 in Ottawa, Royal LePage said.