3
After outperforming most other segments of the housing market, luxury home sales are expected to slow in most big Canadian cities in the coming months, according to a report Thursday by brokerage RE/MAX.
While the high-end of the market usually shows cracks first, during this cycle it appears to be following the trend in broader housing sales, said Michael Polzler, executive vice-president at RE/MAX Ontario-Atlantic Canada.
“There's generally more caution, especially from the middle income, average consumer of homes. They're trying to make sense of what they're hearing out there,” Mr. Polzler said in an interview.
“I think you're going to be looking at a more wait and see approach in many cases.”
Related Articles
Last month, existing home sales activity fell by 19.3 per cent across Canada, and the average home price fell by 5.1 per cent, led by a sales drop in Vancouver.
A more guarded approach is spreading to the higher end of the market, especially given the turmoil in the U.S. financial services sector in the past few weeks, Mr. Polzler said.
This means fewer bidding wars and more time for careful consideration before a home purchase for buyers who are in the market, he added.
In the first seven months of 2008, sales of high priced homes rose year-over-year in 10 of the 15 major markets included in the report.
The largest increases on a percentage-basis were Regina, Saskatoon and St. John's, where the housing markets have been booming, but such increases are measured on a small base of sales.
Sales levels also rose from 2007 in Vancouver, Victoria, Winnipeg, London, Kitchener-Waterloo, Ottawa and Halifax-Dartmouth.
Year-over-year luxury home sales declined by the most in Edmonton, where regular home prices are also falling after a dramatic run-up that lasted until mid-2007. Sales levels also dropped in Kelowna, Calgary, Hamilton-Burlington, and Toronto, the country's largest housing market.
Luxury home sales represent just 5 per cent of the overall housing market but often act as a gauge of overall market conditions, RE/MAX said.
High-End Market Statistics
- Most expensive resale home sale in 2008 - $11.5-million in Vancouver
- Most expensive resale listing - $14.8-million condo in Vancouver, reduced from $18-million earlier this year
- Most expensive new condo sale in Canada - $25-million, in 2007, for pre-sale condo unit in Toronto at One Bloor St. East
- Most expensive new condo listing in Canada - $30-million, penthouse at the Four Seasons in Toronto
