2013 proved another positive year, with a number of fundamentals propping up residential real estate. Yet, nowhere was strength more apparent than in Canada's upper-end housing segment. So much so, in fact, that 2013 could easily be dubbed, 'the year of the luxury home.'
Our RE/MAX Upper End Market Trends Report, released earlier ths week, took a look at sales activity in 16 major centres across the country—and the numbers were nothing short of incredible!
In 2013, 75% of major markets reported sales above year-ago levels, including Hamilton-Burlington (+34%), Kitchener-Waterloo (27%), Greater Toronto (18%), St. John's (7%) and London-St. Thomas (5%). More than two-thirds of markets shattered existing records for the number of upper-end transactions in a single year. Demand and confidence reached an unprecedented crescendo.
Several factors served to create the perfect storm, drawing purchasers at the top end of the spectrum—from rising Canadian and global wealth, solid equity gains and improving economic conditions to the stellar performance of US financial markets and the continuation of historically low interest rates. Add to that the tangibility and low-risk profile of bricks and mortar, and it's clear why luxury homes have become the darling asset class of both local and international movers and shakers alike.
That's not something to take lightly. After all, rarely do the business elite make decisions without concrete research, and that's where Canada's luxury home segment really earns favour:
Since 2009, luxury home sales in half of the country's major markets have more than doubled or tripled—and in one instance quadrupled. Many of Canada's other major centres posted solid double-digit growth over the five-year period. Impressive? Yes! But even more so, when you consider that the meteoric rise took place in a post-recession climate.
Is the momentum set to continue? With the same sound underpinnings in place, 2014 is well positioned to match and possibly eclipse 2013's record performance.