Vancouver’s high-end real-estate market will continue to gain momentum, according to a report from Sotheby's Canada
Sales of single-family homes over $1 million were up 65 per cent in the first half of 2013, up from the last half of 2012.
Accordig to the report, Calgary was the only Canadian city to surpass Vancouver, with sales up 67 per cent in the same category, as reflected in the recent Top Tier Real Estate Report. Luxury condo sales over $1 million were up in Vancouver, Calgary and Toronto, compared to the last half of 2012, and spent fewer days on the market.
"We feel confident that Canada's largest urban centres remain in exceptional positions heading into fall, with healthy market fundamentals from coast to coast," says Ross McCredie, president and CEO of Sotheby's International Realty Canada.
Foreign buyers make up approximately 40 per cent of luxury single-family home buyers in Vancouver, according to Sotheby's International Realty Canada's Top Tier Trends study (April 2013). This trend is expected to continue with China remaining the top market influencer, followed by Iran and the United States.
“A lot of people have this perception that people are getting off an Air China flight and are buying these million-dollar properties and that is an incredibly rare event. What you are seeing is second or third generation Chinese,” says McCredie. “That’s been a trend that has gone on for a long period of time and it’s going to continue in the Vancouver marketplace.”
Another trend that has continued in Vancouver is parents buying condos for their children. According to McCredie, the transfer of wealth between generations in Canada is unprecedented.
“For a young family trying to start out in Vancouver, there is almost no chance that they could do it on their own,” he says.
The report also attributes an uptake in sales to a steadied political and economic environment, following May’s provincial election. Many Sotheby’s clients were worried a change of government would not be positive for the province’s economy, he says.
While Vancouver’ high-end real estate is up in the first half of 2013 compared to the last half of 2012, condo sales 2013 were down by 20 per cent compared to the first half of 2012. McCredie attributes this to a couple of high-profile projects that were deeply discounted last year, spooking potential buyers. Talk of the real estate market being overheated didn’t alleviate buyers’ worries.
McCredie is confident that sales will continue to grow this year and says that there isn’t anything worrying the real estate industry at this point in time. In fact, he believes that Canada has one of the healthiest real estate markets in the world.
“When you look at the Canadian real estate fundamentals it’s one of the healthiest real estate markets in the world,” he said. “All Canadian cities are growing and we have very low vacancy rates in almost all of our cities. So when you have all those different dynamics, it speaks to a healthy market.”