The residential property market in Canada’s major cities and second-home markets is enjoying a high level of demand, both nationally and internationally, according to an Engel & VĂ¶lkers report.
Specifically in the luxury segment, there is a clear surplus in demand in many places that is resulting in a significant rise in prices. This emerged from a survey of six selected real estate markets, based on assessments made by local Engel & VĂ¶lkers residential property shops, between January and September 2017.
Vancouver: International Buyer Interest Focused on Luxury Homes
Real estate in Canada’s metropolitan areas is in particularly high demand. This includes Vancouver’s west coast. The most expensive neighborhood in the port city is Shaughnessy, with its mix of historic and modern buildings. Asking prices for detached homes reached $35.8 million CAD in the first three quarters of 2017. This marks the highest price registered out of all the markets analyzed.
Another exclusive location is West Point Grey. This area benefits from its green spaces, city beaches and proximity to the University of British Columbia (UBC Point Grey Campus). The many waterfront locations in West Vancouver also make it a desirable place to live. Buyer interest in this community to the north of Vancouver centers on high-end freehold condominiums with a high technical standard. Asking prices for freehold condominiums in all three of these premium locations reached $1,800 CAD per square foot. International buyers dominate Vancouver’s luxury property market, accounting for 85 percent of transactions. Chinese citizens make up the largest buyer group here, followed by French and German buyers. Real estate in East Vancouver is witnessing an upward trend at the moment, with millennials particularly keen to secure small-scale lofts in the area.
Emerging Market Trends
- 2018 will continue to see strong growth in the luxury condo segment.
- The tech industry continues to grow, attract and entice new buyers, with Vancouver’s current Amazon bid drumming up extra excitement.
- There’s a shift in luxury consumer demand from traditional design features to modernist aesthetics that prioritize clean lines, quality materials and smart-home technology.
- Entrepreneurs, developers and a new segment of affluent residents are starting to move into Vancouverâ€™s downtown East Side at an accelerated rate.
- Gastown’s eclectic charm continues to keep the neighborhood in demand in 2018.
MontrĂ©al: Growing Demand for Luxury Condos in City Center
A great deal of commercial and industrial enterprises can be found in MontrĂ©al, along with a diverse spectrum of cultural life. The highest-priced location for detached homes in this city is the Golden Square Mile. Asking prices in this historical district reached up to $11.9 million CAD. The highest asking price for freehold condominiums was also in this neighborhood, at $1,440 CAD per square foot. Another exclusive address is Westmount, situated in the heart of the city.
Downtown MontrĂ©al is also an up-and-coming, prime location where many younger, tech-savvy buyers are looking to acquire newly built condominiums with a concierge service. International buyers account for around 30 percent of MontrĂ©al’s premium property market, with buyers hailing from Asia, the U.S., France and Italy. Significant price increases are anticipated over the coming months in Westmount, in particular, due to the high surplus in demand for homes. In the Southwest borough, the conversion of revenue properties into single-family homes is prompting an increase in interest from young families.
Emerging Market Trends
- 2018 will see continued growth in luxury markets Westmount and Sud-Ouest, with strong price increases predicted. This forecast is based on data that show low inventory and high demand resulting in multiple offers.
- Pointe St-Charles is forecasted to be a solid place to invest in, with experts comparing it to the next Griffintown regarding up-and-coming potential. Proximity to the downtown core make it the next neighborhood to invest in.
- The video gaming industry continues to grow in MontrĂ©al, with the government recently approving several grants to the sector, making it an attractive hotspot to open offices. Companies like Ubisoft, CGI Group and Stingray Digital make up the tech ecosystem.
- Millennial consumers are moving away from prioritizing high square footage as a must-have; instead, location is becoming the ultimate luxury, with low commute times to MontrĂ©al’s downtown core in high demand.
- Quality of home finishes are also becoming more and more important.
Toronto: Prime Addresses Sought After Among Families
Canada’s economic center, Toronto, is also one of the most important property markets in the country. Large plots with exclusive residences make the Bridle Path the most expensive area for detached properties in the city. Asking prices here were as high as $11 million CAD. The highest price fetched for freehold condominiums was in Rosedale, at $1,300 CAD per square foot. This central neighborhood is known for its abundance of greenery and its broad choice of schools, which makes Rosedale especially popular among families. Another neighborhood preferred by families is Forest Hill, north of the city center. Buyers tend to focus their attention here on classic and modern detached homes with large garages. Other key purchase criteria include security cameras and smart home technologies. The lack of properties for sale in prime locations here has, in turn, seen prices rise by 5 percent on average in the past year. Domestic buyers account for 80 percent of the luxury property market in Toronto, while international buyers come primarily from China and Iran. Neighborhoods set to witness price increases in the coming months include Yonge-Eglinton, which is undergoing regeneration with the construction of the Eglinton LRT to connect to the city’s subway system.
Emerging Market Trends
- Toronto will continue to see strong growth due to continued demand and short supply. Reports show it has the fastest-increasing population in any large North American city.
- Engel & VĂ¶lkers does not anticipate any drastic increases similar to that of spring 2017, which can be categorized as a melt-up. Rather, a steady increase is expected, showing the market’s much-needed correction is now over.
- Millennials will continue to move away from detached and semi-detached houses in favor of condominiums that are close to the downtown core.
- The Yonge and Eglinton corridor is set for continued growth due to projected completion of LRT.
- Toronto’s booming start-up economy and Silicon Valley North moniker will see continued interest in the market from a global consumer segment comprised of entrepreneurs, venture capitalists and tech executives, including the recent announcement that Google’s innovation offshoot, Sidewalk Labs, is set to build Toronto’s east Quayside and Portlands, known as the Canary District.
Calgary: Premium Locations Close to the Rocky Mountains a Draw for Families
As the venue for the Olympic Winter Games in 1988, Calgary has become well known beyond Canada’s borders. The highest-priced residential addresses in the city include downtown Calgary, West and Northwest Calgary, and the suburb of Pump Hill. Ease of transit connections from here to the nearby Rocky Mountains with its wealth of recreational activities, plus a broad choice of schools on offer, draw families in particular to these areas. Consequently, detached family residences with modern technical standards are highly sought after. The highest asking prices in this segment were registered in Pump Hill, at just over $12 million CAD for a detached home. Asking prices for freehold condominiums in downtown and the Southwest reached up to $700 CAD per square foot. International buyers account for 10 to 15 percent of Calgary’s premium market segment. Chinese citizens constitute the main buyer group by far here, followed by the British and German. Having dropped slightly in recent months, positive growth is forecasted for 2018. The planned opening of an Amazon site with the creation of 750 new jobs is set to give Calgary’s property market an additional boost.
Emerging Market Trends
- Calgary’s market continues to grow at a stable rate, with increased sales volume compared to last year.
- Economic recovery is top of mind, as the market continues to stabilize through strong oil and gas sales (volume).
- Calgary’s West Side and inner city is projected to generate the most interest from developers and buyers in 2018, with inner-city neighbourhoods in high demand from millennial buyers.
Mont-Tremblant: High Demand for Properties With Ski-in/Ski-out Access
Located approximately 130 kilometers northwest of MontrĂ©al, the small town of Mont-Tremblant is one of the most desirable second-home markets in Canada. Known above all as a ski resort destination, it also offers a vast range of other outdoor activities throughout the year. With asking prices of up to $9.95 million CAD, the most expensive addresses for detached properties here can be found on Lake Tremblant. This area attracts buyers for its superb setting between the lake and the ski resort. Large estates with panoramic views and smart home technologies are among the most popular homes of all. Ski-in/ski-out properties in direct proximity to ski slopes and lifts are also extremely desirable. Luxury townhouses and contemporary condominiums with an interior of approximately 4,000 square feet enjoy the highest levels of buyer interest here.
Prices for such properties have risen significantly from a lack of available listings on the market. The top price fetched for freehold condominiums in the first three quarters of 2017 rose over the previous year from $550 to $650 CAD per square foot. In individual cases, particularly unique and grand homes, double-digit increases in sales prices are seen. The scarce supply of existing properties is leading to an increase in new building developments, with building land still available in abundance. Nearly 30 percent of buyers in the luxury segment come from abroad, the majority of which hail from the U.S. and the UK.
Emerging Market Trends
- As traditional inventory continues to decrease, there is an increase in new builds in the markets surrounding Tremblant’s desirable mountain and village areas.
- Current sales are now approximately 75 percent resale and 25 percent new build and/or pre-construction sales.
Bromont: Popular Second-Home Location With Buyers From MontrĂ©al
Bromont is situated approximately 75 kilometers east of MontrĂ©al. The city and surrounding area is a sought-after destination throughout the year and the largest floodlit winter sports region in North America. One of the premium locations for residential property is Bromont itself due to its proximity to the mountains and its accessible transport links to MontrĂ©al. There is a high level of demand here for large houses in direct proximity to the ski slopes. With asking prices of up to $447 CAD per square foot, freehold condominiums here reached the highest price levels in the region.
To the southeast of the city lies the town of Lac-Brome, with its eponymous lake. This region also ranks among the most desirable locations, with prospective buyers drawn by the waterside setting. Other sought-after addresses can be found in Bolton-Ouest east of Lac-Brome. Asking prices for detached properties there reached $4.5 million CAD. The majority of interested buyers in the region around Bromont are Canadians living in Greater MontrĂ©al. French citizens are most strongly represented among international buyers. Luxury homes built within the last 10 years are witnessing a considerable appreciation in value at present.
Emerging Market Trends
- 2018 will see continued new development projects in or close to the Bromont mountain area and ski and cycling trails.
- Millennial buying trends are geared towards condos and new builds; this group is not embracing renovations on heritage homes as past generations have.
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