Experts are talking about Canada’s luxury real estate market once again. It has been how luxury real estate sales had flourished in areas like Montreal and property sales for units with over $4 million price tag had actually jumped to three digit sales figures in the first half of 2019 alone. However, the picture in Vancouver was not as good as sales in the city continued to dwindle. According to the experts, the top tier real estate market in Canada presented different pictures. According to reports which were tracking the number of condominiums sold, along with detached homes and townhomes, the sale of homes priced over $1 million and then the $4 million segments went in different directions.
Earlier, experts had felt that Montreal would be a major emerging center that was set to make new records in terms of sales. As expected, the sale of properties priced over $1 million had jumped to 5% in the first half of 2019 as compared to the same period last year. The sale of properties priced over $4 million also rose to 267 percent with 11 major properties sold and three of them were sold in the first half of 2018 itself.
Key aspects worth noting
It was also noted that the taxation system in Montreal on real estate was also a major driving factor and it was easier and affordable making transactions here than in Toronto and Vancouver. The buyers, in this case, were mostly new Canadians like foreign investors, permanent residents just acquired their residency and expatriates who are thinking of settling here long term. Nevertheless, the group is only a small percentage of the top of the tier sellers. There was a healthy increase in the sale of properties over $1 million in the Greater Toronto area and here about 8612 properties were sold in the first half of the year in 2019, which was an increase of 12% from the same time in 2018.
On the other hand, the sale of properties over $4 million in the GTA fell 19% and according to the reports, one of the reasons for the dip was that the properties were not being listed in the Multiple Listing Service as the sellers preferred to opt for private sales. This is because more information is made public when the sales are made through the MLS and not all developers want to do that. According to the experts, this trend will definitely affect the real estate markets in the other major Canadian cities as well.
Market trends in recent times
Vancouver was a major market once when it came to luxury property but the sales continued to drop after the government started intervening. Mortgage rules became tighter, the tax burden continued to increase and stringent government policies were applied. Add to that the fact that some sellers were hesitant and buyers are also often fickle in a market that is very dynamic and do not want to make a commitment just yet, and hence bookings of new properties went down significantly. The homes priced over $1 million fell to 33% to 1308 properties and homes that are priced around $4 million fell to 34% with 73 homes sold only. According to Sotheby’s, the market activity is very slowly showing signs of revival and it is expected that the seller’s expectations would be met in the last quarter of 2019. In Calgary, for instance, the sale of homes priced around $1 million also fell by 21%.
This is because some conditions have evolved in Vancouver that has created opportunities for prospective buyers who were considering some properties out of their reach until now to actually invest in them finally. There are also buyers who were thinking of buying condos priced around $1 million to now invest in townhomes, attached or detached, at the same price. Sale of the condos priced around $1 million fell to about 51% in the first half of the year from 708 condos sold between January and June 2018 to 359 within six months of 2019. House prices are being adjusted and readjusted in a very short span of time but at least the market is showing signs of renewed activity in the future. The bookings of single family homes priced around $1 million have gone up. The government will have to play its part and try to make the home transaction process easier for both the parties and that will pave the way for better sales in the future.