Luxury Home Sales Surge in Metro Vancouver

REW, November 12, 2011

From January 1 to the end of September of this year, 953 homes sold in Greater Vancouver for $2.5 million or more each, according to Eugene Klein, president of the commercial division of the Real Estate Board of Greater Vancouver. “That is almost as many as the three previous years combined,” Klein said.

The eye-popping sale prices have spurred considerable international interest, with the Board interviewed by major news outlets from the US, Europe and Asia, Klein said.

The demand for luxury homes is not seen just in the traditional high-end markets, such as West Vancouver or Vancouver’s West Side, but is also in the new home market from the Fraser Valley to Greater Vancouver, according to studies.

The Teranet-National Bank composite new home index shows that the typical price for a new home in Metro Vancouver increased 9.9 per cent as of August, compared to a year earlier. This is the highest increase for new home values in Canada.

“The strength of the upper-end segment continues to defy expectations,” said Elton Ash, regional executive vice-president, Re/Max of Western Canada, which profiled the luxury market in a study earlier this year.

According to the report, the improved financial standing among high net worth households is the major factor driving strong sales activity at the top end of Canada’s housing markets. The report notes, though, that foreign buyers also account for a number of luxury home sales in BC.

Re/Max examined 12 major Canadian centres and found that luxury sales surged in close to two-thirds of housing markets in the first four months of 2011, compared to the same period in 2010.

In terms of percentage increases over the period, Metro Vancouver — where foreign investment has also played a major role — led the nation with a 118-per-cent increase in luxury home sales, which ReMax defined as prices of $2 million or more.

That was followed by:

• Ottawa (59 per cent)

• Calgary (51 per cent)

• Halifax-Dartmouth (27 per cent)

• Winnipeg (24 per cent)

• Hamilton-Burlington (13 per cent)

• Greater Toronto (9 per cent).

“Greater Vancouver’s luxury market continues to show unprecedented strength, with the number of sales over $2 million more than doubling in the first four months of 2011,” the report said.

New home buyers should not be deterred by all the action in the high-end market. A tour of new home projects shows that there are many new condominiums, townhouses and even detached houses priced well below the seven-figure range.