Everyone is still feeling the hit from the mortgage rules that were imposed a year ago (in two days, to be exact.) One of those rules eliminated mortgage insurance for luxury homes altogether, which had many thinking that this would severely affect the sales in this market. As it turns out though, the rules haven’t had that much of an impact. What has though, is weather.
“Compared to a year ago, it’s steady,” says Christian Vermast, a sales agent with Sotheby’s International Realty Canada, and a high-end broker in the city of Toronto. “The up to $2.5-million market has been extremely active.”
But, he says, a ‘miserable’ winter that somehow stretched long into April, and very little spring, held buyers back more than anything. Since May though, Vermast has seen the market pick up considerably.
That might be because 300 properties in the $1 million to $2.5 million market have been listed on the market since May. Of those, 100 listed properties between the $1.5 million and $1.35 million price range have sold above asking price. Those properties have seen an average list-to-sale price ratio of 101%.
And Canadians shouldn’t be swayed by the notion that there are no foreign investors left interested in the country; nor should they even consider the notion of banning foreign investors from buying to help dissuade prices from climbing higher. This is because, says Vermast, many of the buyers in this luxury market have been from the United States, Iran, Russia, and China, and they’ve been helping to fuel this market. Investors from Asia have been particularly helpful in keeping this market steady, and have helped to drive luxury home sales over and above the $5 million asking price.
In addition to investors from other countries, expatriates are also starting to return home after residing in the United States or England. Most of these are those that left a decade or more ago, and are returning home to raise their children, according to what Vermast has seen.
But Brian Torry, manager and broker at Bosley Real Estate Ltd., says that while luxury markets are keeping their pace, it still all depends on location.
“Good listings are selling very quickly if you’re in a good neighbourhood,” he says.
The good news, we suppose, is that there aren’t too many luxury homes in bad neighbourhoods.
