Luxury Home Sales Soar : Report

Luxury home sales soar: report
Upward momentum throughout real estate sector

Last Updated: Monday, April 26, 2010 | 11:41 AM ET

Luxury homes in Canada sold briskly during the first three months of this year, shattering records for first-quarter activity in nine of 13 Canadian markets, a RE/MAX report says.

The report called Upper End 2010 cites improved economic performance, increased personal wealth, immigration and foreign investment as catalysts in the sales surge.

The recovery in luxury home sales is “nothing short of remarkable,” said Elton Ash, regional executive vice-president of RE/MAX in Western Canada.

“This segment of the market was hardest hit when the recession took hold, yet its comeback has been fast and furious.”

Sales rates over the same period last year increased 700 per cent in Kelowna, B.C., 300 per cent in Montreal and 263 per cent in the Greater Toronto Area, RE/MAX says.

The entry point for high-end homes in Vancouver hit $2 million, with Toronto and Montreal posting entry-level luxury home prices of $1.5 million.

The most affordable luxury homes in Canada are in St. John's, N.L., where the starting price is $400,000, and in Halifax-Dartmouth, where luxury homes start at $450,000, the report says.

The company's biggest luxury home sale in Canada during the first three months of 2010 was an 11,600 square-foot house on the west side of Vancouver that changed hands for $10.06 million.

The most active buyers so far this year have been business executives, entrepreneurs and professionals.

The vice-president of RE/MAX in the Ontario-Atlantic region said he is optimistic about real estate sales at every level.

“Real estate continues to resonate with purchasers at every price point,” Michael Polzler said.

“With the top end of the market shifting into high gear, every segment of the residential real estate sector is now operating in tandem,” he said.

Ash told CBC News he believes higher prices and renewed activity are here for the long term. He pointed to the slow but steady recovery of economies in the United States and United Kingdom.

“As those much larger economies continue to improve slowly and cautiously, that will help us,” Polzler said, “So is there a real estate bubble? I think it's unlikely, given the other circumstances at play.”