The three largest cities in central Canada are seeing improvement in their luxury homes markets.
Prices are on the rise in the greater regions of Montreal, Toronto and Ottawa during the 12-month period ending Jan. 31, 2020, says a luxury homes report from Royal LePage.
The report says limited inventory in Montreal and Toronto was a factor for prices increasing on homes priced at $1 million or more. Contributing to low inventory is a lack of confidence among potential move-up buyers that they will find a suitable listing if they sell their current homes.
In Western Canada, both the greater regions of Vancouver and Calgary showed year-over-year declines in luxury home prices.
“We are seeing encouraging signs that Vancouver’s luxury market is stabilizing,” says Kevin Somers, chief operating officer, Royal LePage Real Estate Services Ltd. “While no near-term price increases are expected in the Vancouver and Calgary luxury markets, buyers and sellers are increasingly more confident that the market is stable.”
The median price of a luxury home in Calgary in the last 12 months dipped slightly by 0.8 percent to $1,950,591, with the median price of a luxury apartment-style condominium decreasing 2.0 percent to $887,011.
“We are seeing buyers who were priced out of the luxury market in previous years buy their dream home,” says John Hripko, agent, Royal LePage Benchmark in Calgary. “Luxury homeowners are also taking this opportunity to move up in the segment. The opportunity for those trading up within the luxury segment is unprecedented (because) inventory for luxury property is not appreciably increasing and sales during the 12-month period are steady compared to the year prior.
“Sellers are reluctant to put their properties on the market and sell at a loss. The collective impact of this trend has minimized price decline.
“Luxury properties closer to city-centre have been more resilient at holding their value.”
Luxury homes sales in Calgary reached 28 homes in both in January 2020 and January 2019, according to the Calgary Real Estate Board. The mix varied by type, with 23 single-family luxury sales in January 2019, compared to 26 sales in January 2020.
January 2019 saw five luxury sales in the semi-detached category, compared to two sales in January 2020. There were no sales in the condominium apartment category in either year.
For the balance of 2020, Royal LePage expects Calgary’s luxury prices are expected to be relatively flat. The median price of a luxury house is expected to decrease by 0.5 percent to $1,941,000, while the median price of a luxury condominium is forecast to decrease 3.0 percent to $860,000.
Data analyzed in this release contains both resale and new build transactions, provided by Royal LePage’s sister company, RPS Real Property Solutions, as well as company projections.