Royal LePage has recently released the findings to a national survey of residential luxury real estate professionals on current and long-term trends in the luxury housing market in four Canadian provinces.
The Carriage Trade Luxury Properties Report also analyzes buyer profiles and preferences, foreign buyer activity and how the market has evolved in British Columbia, Alberta, Ontario and Quebec’s luxury housing markets. Analysis was completed by comparing average home prices of Royal LePage Carriage Trade Luxury Properties in designated areas for 2005 and 2015 and polling 250 real estate advisors specializing in high-end property sales across Canada.
The report found that in 2005, Canada’s economy was strong thanks to a commodity boom causing the western provinces to experience economic highs, and the Canadian dollar was relatively strong.
In 2015, the effects of the significant global recession in 2008 and 2009 caused the Bank of Canada to cut interest rates to generational lows. Although Canada did not experience the worst of the slump, rates remain low even now. Commodity prices also fell along with the Canadian dollar, which encouraged foreign investment in the economy and housing sector.
The survey also found that performance of residential luxury real estate varies across Canada’s largest markets, mostly caused by an uneven economic landscape. British Columbia and Ontario are leading in sales volumes, price appreciation and demand in the luxury sector, especially in Vancouver and Toronto.
Activity in the Alberta luxury real estate market was led by Calgary, but recently declined due to the sustained drop in crude oil prices, economic uncertainty and wavering consumer confidence. In Quebec, the luxury real estate market is looking up, with unit sales particularly strong in 2015 as the province benefited from low interest rates, a lower Canadian dollar and expanded U.S. economy.
The research found that the majority of local luxury real estate professionals across the country believe foreign buyer activity has increased in their region over the past year. In addition, 24 per cent of advisors believe that over a quarter of luxury sales in their region are purchased by foreign buyers, and 60 per cent believe foreign buyer activity will continue to grow for the remainder of 2016.
Although the global economic climate is causing uncertainty, the residential luxury real estate market continues to be a growing segment of Canada’s national housing market.