Sales of houses that cost at least $1 million are booming in Canada's four biggest cities, high-end real estate firm Sotheby's says.
Sales of homes priced higher than $1 million increased in Vancouver, Calgary, Toronto and Montreal, Sotheby's said in a report published Tuesday. But as with other segments of Canada's housing market, demand for luxury homes isn't increasing evenly.
In the first half of 2014, overall sales in the million-dollar-plus category were up by more than a third compared to last year's level in Toronto and Vancouver. But Toronto was the only place in Canada where sales increased in all categories of housing that Sotheby's tracks — condos, attached homes and detached homes.
"Given strong economic fundamentals, increased consumer confidence and mortgage lending rates that remain at historical lows, all markets are expected to gain momentum in the latter part of 2014," Sotheby's said.
It is single-family homes, however, that generally can command a premium on the price side. In all four cities tracked, there was an increase in the number of single-family homes that sold for above the listed price. In Toronto and Vancouver, more than 30 per cent of luxury single-family homes sold for more than the asking price. In Calgary and Montreal, the number dropped to a little under 10 per cent.
Other things of note in the regional findings include:
- Calgary's condo market saw fewer sales of condominiums priced over $1 million in the first half of 2014 compared to the year prior, a trend that Sotheby's chalked up to there being fewer homes listed in that price point.
- Between January and June, a total of 3,956 homes were sold for more than $1 million across the Greater Toronto Area. That's a 34 per cent jump compared to the figure from the same period in 2013.
- Despite a soft start to the year, sales of million-dollar homes in Montreal started rebounding quickly after the Quebec election in April, when the separatist Parti Québécois was soundly defeated.
According to the latest data from the Canadian Real Estate Association, the average home in Canada sold for $416,584 last month, a seven per cent increase compared to the same time last year.
At the end of this month, Canada's taxpayer-backed housing agency, the CMHC, will stop insuring homes that cost more than $1 million, even if the buyer can come up with the minimum downpayment of 20 per cent. That means that starting in August, a would-be buyer of a million-dollar would have to get somebody else to insure the purchase.
The housing agency says loans like that only represent about three per cent of all the loans it backed last year.