In Canada – and Winnipeg in particular – the luxury home market is booming. 24 percent more homes valued at more than $500,000 changed hands during the first fourth months of this year than during the same period in 2010, and a local real estate report predicts that “luxury sales [are] on track to set an all-time record this year”[1]. Cliff King, of REMAX Executives Realty is predicting that between 300 and 350 luxury homes will sell in the area in 2011, solidly beating the previous record of 283.
Similar spikes in luxury buying have occurred across the country, with “Canada’s growing band of millionaires and an influx of foreign investment” creating a luxury boom in six of Canada’s eight “major centers”[2]. However, real estate professionals insist that there is not a bubble forming, but rather “just underlying confidence” and an increasingly wealthy Canadian population with a net worth that is set to double by 2020. To further feed the frenzy, the country on the whole has a lack of supply of luxury properties. This is creating bidding frenzies as buyers compete with each other for the right to buy in the limited market.
Some analysts call Canada’s market “quirky,” and assert that individual facets (e.g. the luxury market) do not necessarily impact the market as a whole. Do you agree, or do you think this news indicates that Canadian property is the thing to buy?
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[1] http://www.winnipegfreepress.com/business/luxury-homes-selling-at-record-setting-pace-122217843.html
[2] http://www.torontosun.com/2011/05/18/luxury-housing-market-spikes-as-canuck-wealth-grows
