Lauren Kerensky, Forbes.com
October 17, 2007
While the subprime problem south of the border continues to eat away at America's housing markets, homeowners across Canada are enjoying strong sales.
Those in cities like Calgary, which boasts a robust local economy thanks to the oil and gas sectors situated there, and Toronto, the country's financial headquarters, in particular, are reaping the rewards of a luxury housing boom.
Chew on this: Based on sales activity in the first half of 2007, the Canadian Real Estate Association expects total home sale transactions this year to rise by 8.1%. More notably on the rise, though, is the national average sales price. It increased from $276,646 in July 2006 to $311,495 in July 2007, a whopping 13% percent. Much of this growth can be attributed to the country's thriving luxury market.
"The high-end market is booming across Canada as more baby boomers inherit large amounts of money, and the Canadian economy is booming right along with it," says Ann Chiasson, an agent with Sea to Sky Premier Properties in Whistler, British Columbia. She adds that reasonable interest rates and a desire for unique, higher-end properties are driving the market as well.
The latest Carriage Trade Luxury Properties Report released by Royal LePage Real Estate Services found that in Greater Toronto, Calgary, and Greater Vancouver--three areas containing many of the nation's priciest properties--1,237 homes going for $1 million and up were sold in the first quarter of 2007, compared to the 995 sold in the first quarter of 2006. Calgary had the greatest increase--38%--due to an influx of international buyers and local executives putting down roots.
"There's a bit of a bidding war going on," says Gino Romanese, senior vice president of Royal LePage Real Estate, Ltd. "Demand on luxury homes is still outstripping supply, so there's still little inventory in the luxury home market."
If the property is a particularly coveted one, perhaps a waterfront or mountainside estate, it defies all conventional sale patterns. Romanese recalls a home that recently sold for $1.2 million after being on the market for a mere two days. Homes are currently averaging about two months on the market.
To residents in the U.S., where the $135 million Hala Ranch in Aspen tops the list of most expensive homes, and the asking price for a four-bedroom single family home in many areas can easily begin at $1 million, Canada's numbers may be unimpressive.
While the Great White North did enter the multimillion-dollar housing market slightly later than some other regions, it is indeed following all the usual high-end pricing patterns. That is, numbers are going up.
"One million used to be what we would call a "carriage trade" property as an elite distinction for the home," recalls Elli Davis, a leading Sales Representative for Royal LePage Toronto. "Today I would say it's closer to $2 million and up. Prices in new condo developments in Toronto are up in the range of $1,000 to $1,500 per square foot, which is a relatively new price range in Toronto in the last few years."
In Toronto, these homes generally range from $2 million to $15 million and are located in Forest Hill, Rosedale, the Bridle Path, and Lawrence Park. The priciest pads in the country may not yet command nine figures, but they are impressive nonetheless.
Take The Uplands in Victoria, British Columbia, the locale of the most expensive home in the Great White North. For $28.5 million Canadian, (approximately $28.9 million U.S.) you can call the oceanfront estate, dubbed "Sweet Pea," yours. The seven-bedroom, five-bath estate sits on 2.4 acres of gated property with over 1,400 feet of ocean frontage and its own private pond.
Just as stunning is a nine-year-old property in Greater Vancouver that boasts two separate wings, an indoor swimming pool, a four-car garage and a fully equipped theatre room. The 18,600-square-foot home is sited on 1.12 acres in the exclusive Shaughnessy neighbourhood.
Houses in the multimillion-dollar range are becoming much more common in Canada, and buyers are jumping on coveted properties and high-end developments before they're even built. But that is not to say Canadians aren't still afflicted with sticker shock. Lisa Williams, a broker with Century 21-Royal Victoria Realty, has had a $15 million oceanfront property on the market for over 10 months. "Very high-end homes can certainly take more than a year to sell, and sometimes properties don't sell," she says. "We have a couple of properties on the high end that have been on the market for a number of years."
All that waiting can call for a price reduction in order to attract interest. No. 9 on our list, the Teddington Park estate, for example, last ranked at the top of this list with an asking price of $22 million. It has since been reduced to $19.5 million to attract an acceptable offer. Sounds like even Canadians should start considering that a bargain.