The number of luxury home sales rose noticeably in the Q1 of 2010 as affluent purchasers moved to take advantage of favourable market conditions across the country, according to a report released Monday by RE/MAX.
The report called Upper End 2010 cites improved economic performance, increased personal wealth, immigration and foreign investment as catalysts in the sales surge.
The definition of a luxury home varies by market, from $400,000 in St. John?s to $2-million in Greater Vancouver. The amount is usually achieved by looking at the top 1-to-5 percent of sales in any given market.
A luxury home was most expensive in Greater Vancouver at $2-million, followed by $1.5-million in Greater Toronto and Montreal Island.
In Vancouver, for example, the average price for a home hit $1-million in March, including high-end offerings. Prices are at historic highs, a single, standard detached home averages $800,341 where it averaged about $650,000 a year ago.
Upper-end markets were most abundant in Atlantic Canada and smaller centers in Ontario, where luxury home prices started at $400,000 in St. John?s, $450,000 in Halifax-Dartmouth, $500,000 in London St. Thomas, and $750,000 in Ottawa and Hamilton-Burlington. Winnipeg and Edmonton saw the luxury market around $500,000 and $850,000 respectively.
Buyers who returned to the market in the first quarter were able to take their time making up their minds because the market is balanced. This contrasts with the broader market, where analysts worry that low interest rates have created an unsustainable bubble as buyers rush to take advantage of what they see as a market with limited downside. This has led to a rapid increase in average national sale prices, almost 20 percent in the last year, as buyers bid each other higher in bidding wars.