High-end homes are still a good investment
Changes to real estate and mortgage policies over the past year have had a negative impact on luxury home sales but values appear to be holding up well.
A new report from broker Royal Le Page says that despite a decline in sales in some markets, including the Greater Vancouver and Greater Toronto areas, there are positives for the luxury homes market.
“Home prices in Canada’s luxury real estate market have remained remarkably resilient when you consider the economic headwinds that serial government interventions have created,” said Phil Soper, president and CEO, Royal LePage. “The resilience of home values reflects the strong aspirations of luxury buyers to reside and work in cities that are consistently ranked among the most desirable on the planet.”
Condos are hot right now
Following a traditional investment strategy in high-end homes – the single-family detached market – appears not to be the best option currently.
In the hottest markets, it is luxury condos that are performing best and outstripping price appreciation of the detached sector.
In Greater Vancouver for example, the median price of a detached luxury home was up 5.2% in the first four months of 2018 compared to the same period of 2017. For condos, there was a 7% gain.
In the GTA, the median price of a detached luxury home barely moved (down 0.2%) while condos gained 10.4%.
However, other Canadian markets are more traditional.
In Greater Montreal, detached homes posted a large gain (9.1%) compared to 3.9% for condos; Ottawa also outperformed for detached homes with a 6.3% gain compared to 4% for condos.
Calgary saw decline for condos (6.1%) while detached homes gained 0.6%.
The year ahead
Through to spring 2019, Royal Le Page expects further gains for the luxury market with the exception of Calgary.
The trends seen in the first four months of 2018, with condos leading in Greater Vancouver and the GTA, are expected to continue.
Further details are available at royallepage.ca
