Luxury market still hot

Luxury-home sales in Canada have been surprisingly strong given the uncertain economic climate and growing weakness in the general housing market, says a report released yesterday.

Real-estate group Re/Max said sales of "upper-end" homes -- defined as roughly the top five per cent of homes in terms of price in their respective markets -- were up during the first seven months of this year in 10 of the 15 major Canadian markets tracked.

It said in all but two markets, luxury homes were the best-performing category in terms of sales performance compared to last year.

However, the real-estate organization said strength in this market segment is not expected to last.

"The market for luxury homes is usually the first to show pressure cracks, but the reverse is actually true this year, with pent-up demand [due to trade-up activity], less speculation and job transfers all factors contributing to stability in this segment," Michael Polzler, Re/Max's executive vice-president for Ontario and Atlantic Canada, said.

But financial market conditions and more higher-end homes being put up for sale are expected to curtail both sales volumes and price levels in the coming months, Re/Max said.

Elton Ash, Re/Max's executive vice-president for Western Canada, said in a statement that "we are seeing a return to more balanced conditions.

"This situation is expected to have an impact on high-end values in coming months, especially in areas that have experienced consistent double-digit growth."

In terms of growth in upper-end homes sales, Regina saw the most proportionally this year at 306 per cent. Winnipeg was next at 89 per cent, followed by St. John's, N.L., at 78 per cent.

The minority group of cities that saw sales declines among their most expensive homes group included Toronto, Hamilton, Calgary, Edmonton and Kelowna.

Each market has a different price point that marks what Re/Max defined as the start of the luxury-home category.

It ranged from about $2 million in Greater Vancouver to $1 million in Calgary to $750,000 in Ottawa, and $400,000 in St. John's and Halifax.

Re/Max said the most expensive MLS residential sale this year was for $11.5 million in the Vancouver area.

It also noted that a property in Toronto was listed at $9 million but a bidding war pushed the sale price to more than $11 million.

The most expensive condominium in Canada is currently listed for sale at $14.8 million in Vancouver, reduced from $18 million earlier this year, it said.

Re/Max said the most expensive listing in the country is a penthouse on the 55th floor of a Four Seasons Hotel currently under construction in Toronto, with an asking price of $30 million.

(prepared by Derek Amba/Vancouver Province)