Sotheby’s International Realty Canada is forecasting that the high-end real estate market will gain momentum in fall 2013, and expects several regions to transition into sellers’ markets before the end of the year.
“We feel confident that Canada’s urban centres remain in exceptional positions heading into fall, with healthy market fundamentals from coast to coast,” says Ross McCredie, president and CEO of Sotheby’s International Realty Canada.
The high-end real estate market gained traction in the first half of 2013 over the last half of 2012, with sales up 65 per cent in Vancouver, 67 per cent in Calgary, 61 per cent in Toronto and 29 per cent in Montreal in the single-family home category, says Sotheby’s. Luxury attached home sales in all four markets increased as the average numbers of days on the market declined. Sales of condos over $1 million were up in Vancouver, Calgary and Toronto.
The company says key indicators for the fall market include strong national and regional economic fundamentals, as well as expected growth in the volume and diversity of international buyer demand for luxury real estate from regions including China, Russia, the Middle East, India and the United States.
The Bank of Canada’s September announcement confirming interest rate stability will have a positive impact on the high-end market, says the forecast. Approximately 50 per cent of luxury buyers use mortgages to finance their homes. A significant portion of domestic and international investors also use mortgages as a strategic component of their investment strategy, says the company. Many international investors see the conservative fiscal policies of the Canadian government as a positive factor.
It says entry pricing for luxury single-family homes in Canada’s major urban centres will remain stable at $2 million on average, with regional variations. The luxury condo market will remain stable across most Canadian markets, while Toronto’s high-end condo market is expected to strengthen.
The forecast says that in spite of an upward trend in average sales price in several markets and several product categories, these prices will continue to find consumer support.