Fiona Anderson
Sun
Sales of “luxury” homes in the Greater Vancouver area increased 18 per cent, from 627 to 739, in the first six months of this year compared to the same period last year, a Royal LePage Real Estate Services report released Thursday said.
The increase in the number of luxury homes sold — which in Vancouver is defined as over $1 million — is due to several factors, said Bill Binnie, owner of Royal LePage Northshore.
“There are a lot of people out there who have either done well in a previous home and they are moving up to what would be considered a luxury home with their equity,” Binnie said. “And there also have been people who have moved into the area that have brought wealth with them.”
Continued confidence in the economy also plays a role.
“People are saying ‘well okay, I’ve got confidence that my business is going to do well [or] I’m going to continue being employed, so we’ll take the big step,” Binnie said.
There are also people from outside Canada who think Vancouver prices are a steal.
“If you take a look at other cities on the Pacific Rim, like San Francisco, our prices are far less and people will move from those cities and see us as a bargain,” Binnie said.
Luxury homes were in high demand across the country with sales increasing more than 40 per cent, year-over-year, in the first two quarters of the year, the report said.
In oil-rich Calgary, luxury home sales, ($900,000 or more), tripled year-over-year during the period, with 110 units sold compared to 37 — more than were sold in all of 2004.
Sales of Toronto homes priced at $1.5 million or more jumped 48 per cent, year-over-year, in the first six months of 2005 to a historical high of 288 units from 195.
Sales of properties in the high end of the market in Winnipeg — those at $300,000 or higher — more than doubled.
Sales in Ottawa declined seven per cent for houses at $750,000 or more, while homes priced at $400,000 and up in Halifax increased by 46 per cent per year on average between 1995 and 2004 while overall sales grew by four per cent, the report said.
Meanwhile, the Vancouver real estate market set another record in August for existing home sales, a report by the Canadian Real Estate Association released Thursday said. Seasonally adjusted sales activity through the Multiple Listing Service recorded 3,800 sales in the Vancouver area, up 45.7 per cent from last August. Sales for the first eight months of the year were up 9.2 per cent over the same period in 2004.
“It is something we are seeing across Canada in that activity remains very strong. In fact many markets achieved record highs,” the association’s chief economist, Gregory Klump said.
Georges Pahud, president of the Real Estate Board of Greater Vancouver, said what is unusual is the volume in August, traditionally a slow month.
People believe in the market, Pahud said. Confidence in the economy and lower interest rates continue to have an impact.
Demand curve:
PricewaterhouseCoopers has analyzed where they see market demand versus planned condo supply.
© The Vancouver Sun 2005