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Surge in luxury home sales signals stronger spring market

Strong sales of luxurious homes paint a promising picture for the upcoming spring housing market across major Canadian cities, as per a recent report unveiled by Re/Max Canada on Tuesday.

The report delves into the real estate landscape of 10 key urban centers, revealing a notable uptick in the sale of high-end properties during the initial two months of the year. Impressively, more than two-thirds of these markets saw a surge in luxury home transactions, with many registering double-digit growth compared to the same period in 2023.

Christopher Alexander, President of Re/Max Canada, emphasized that although current figures fall short of the peak levels observed during the COVID-19 pandemic, the resurgence in luxury sales indicates a broader recovery in the country's primary hubs.

Almost all regions showcased a robust start to the year, notwithstanding a disparity between buyers seeking bargains and sellers holding firm on their price expectations. Saskatoon, Montreal, and Calgary led the pack with increases exceeding 50 percent, showcasing a robust demand for upscale properties.

The buoyancy in luxury home sales extended to other cities like Edmonton, Winnipeg, Halifax, Toronto, and London, with Ottawa being the sole exception experiencing a decline compared to the previous year.

As the prospect of the end of quantitative tightening looms, buyers are capitalizing on softer housing prices. Re/Max highlighted that the allure of luxury properties, encompassing both freehold and condominium units, is bolstered by declining overall values, substantial equity gains, and the anticipation of lower interest rates.

According to Alexander, there's already a ripple effect in motion, with heightened demand in lower price brackets cascading into the luxury segment. He noted the continued significance of equity in propelling demand at the top tier of the market.

Moreover, the report revealed a shifting demographic composition among luxury home purchasers, with younger buyers assuming a more prominent role. This demand emanates from various groups, including high-income professionals, retirees, empty-nesters, Gen X, millennials, newly arrived immigrants, and multi-generational families.

In a bid to extend their purchasing power, some luxury buyers are exploring less saturated markets such as London, Ontario, Halifax, Calgary, Edmonton, and Saskatoon.

Amidst these developments, Re/Max underscored a significant drop in activity among foreign buyers since the enforcement of the foreign buyer ban in January 2023, extended until early 2027. This policy shift has particularly impacted the ultra-luxury segment in major markets like Metro Vancouver and Toronto, as well as the condominium market in Montreal.

With buyer enthusiasm palpable as the spring market heats up, the resurgence in luxury home sales sets an optimistic tone for the broader Canadian real estate landscape.



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