Pent-up demand is set to drive sales of homes at the higher end of the market according to RE/MAX Canada
Tight inventory clashing with strong demand in major Canadian housing markets is now impacting homes in the luxury sector according to a new report.
RE/MAX Canada has published its 2023 Spotlight on Luxury Report, looking at 15 housing markets coast to coast. It found that the depletion of available homes is driving prices higher for lower price points and increasing demand for the luxury sector.
Overall sales in the high-end market were lower in the first quarter of 2023 than a year earlier but were at least as strong as the fourth quarter of 2022 in 10 of the 15 markets included.
And Christopher Alexander, president of RE/MAX Canada, says that bodes well for the second quarter.
"Bolstered by lower fixed-term mortgage rates and attractive housing values, buyers are taking advantage of this window of opportunity to secure home ownership,” he said. “Listings, however, are few and far between in most areas of the country and finding the right home has proved challenging."
Elton Ash, EVP at RE/MAX Canada says there is likely to be an additional spike in demand for Canadian housing markets due to external influences.
"Recent stock market volatility and bank failures south of the border that have sent shockwaves throughout the financial markets may provide an additional boost for Canadian housing markets as buyers turn to the security of bricks and mortar yet again,” he said. “While concerns exist over the possibility of rising overnight rates and recessionary pressures later in the year, the spring market appears to be shifting into full swing."
Inventory constraints
In some markets, there is now tighter inventory than there was during the pandemic, and this continues to be the lynchpin of the Canadian market and something that Alexander says needs to be addressed.
"The pattern of heating and cooling housing markets emerges time and time again, and it is directly linked to our issues with supply and the inability of governments at all three levels to get shovels in the ground across our nation, which is now approaching 40 million people in population,” he said.
While welcoming the rising population, Alexander added that we need to be certain that adequate housing, not to mention vital infrastructure, is in place to support the influx of newcomers.
