Call it the Peninsula or the Lower Mainland’s Carmel Valley, but in simple terms, White Rock/South Surrey is the hottest of hot spots in the nation’s top tier of the real estate market, according to a national survey by RE/MAX realty.

The locale’s seaside estates and secluded hillside view lots saw 68 property sales in excess of $800,000 from January through the end of August, a 151-per-cent increase over the 27 transactions in that range during same period of 2003.

In a survey of its offices across the country, and based on Multiple Listing Service data, RE/MAX found that sales in the upper end of the market in most cities increased at least 40 per cent.

Vancouver‘s West Side, with 237 homes valued at more than $1 million changing hands, did see more sales, but as a percentage that number represented a year-over-year increase of 60 per cent.

Victoria saw 206 sales of homes worth $700,000 or more, a 108-per-cent increase from 2003; and in West Vancouver, 222 properties in the $1 million-plus range were sold, representing a 96.5-per-cent increase from 2003.

Between them, White Rock/South Surrey, Victoria and West Vancouver saw the biggest increases in high-end property sales in Canada, which the report’s authors took as a sign of a strong overall economy.

In White Rock/South Surrey, RE/MAX representative Al Hippsley said that demand in the region is largely being driven by market activity in surrounding areas.

“Interestingly, the majority of buyers buying what is considered high end are not buying up in value,” he said, adding that they are simply moving from one exclusive area of the Lower Mainland to another.

To date, the most expensive sale in South Surrey/White Rock was a house on the bluff of White Rock’s Marine Drive, which went for $3.98 million.

The priciest current listing, a 9,424-square-foot mansion on 3.2 acres, has an $8.95-million asking price, and there are another 87 high-end homes listed.

West Vancouver, however, saw the nation’s most expensive property sale. There a buyer paid $17.5 million for a waterfront home that is now back on the market for $19.8 million.

In White Rock, buyers are coming from downtown or the North Shore. They are executives or entrepreneurs who have been successful, Hippsley said, and they want the seaside location that has a small-town feel, but is still urban and close to their offices in Vancouver‘s core.

Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said people are attracted to the area because of its seclusion.

In recent years, he has noticed people buying older homes on large lots and replacing them with custom homes. In other areas, such as Morgan Creek, subdivisions with one-acre lots have opened up which are “estate lots in every sense of the word.”

“People have discovered it and it’s the place to live,” Simpson said.

Simpson added that just as low interest rates have helped first-time buyers get into the market, favourable rates allow buyers in the top tier to carry larger mortgages and move up the market.

The RE/MAX survey found strength in the top-end market across the country. Regina experienced a 70-per-cent increase in sales over $250,000, which put it fourth on the survey list, and Winnipeg saw a 70-per-cent rise in sales of homes over $500,000, giving it the fifth-biggest increase in sales.

Elton Ash, RE/MAX vice-president and regional director for Western Canada, said the definition of an upper-end home was specific to each market’s conditions based on average price and attributes, such as view and location, that make homes desirable.

He said the survey points to strong consumer confidence. Consumers are buying, which influences corporate and business profits, which is reflected in the high-end property market.

“It sort of gives us a measure of how the economy is performing,” Ash said. “Typically, the people in this market are senior executives, entrepreneurs and the self-employed who are enjoying the success of those businesses.”

Rising property values influence the prices being paid, but Ash added that those values also give existing higher-end owners additional equity in their homes, which also allows them to move up in the market.

Ash said the upward trend in mortgage rates, sparked by the Bank of Canada’s recent quarter-point increase in its short-term lending rate, will likely have little effect on the upper-end market.

The RE/MAX survey found that interest rates would have to rise between three and four per cent before buyers would be concerned about affordability, and Ash anticipates they won’t go up by more than one per cent over the next 12 to 18 months.

Ash added that buyers at the top end of the market also compare the returns on real estate with stock market gains, and in that arena real estate also comes out looking good.

Kelowna saw 19 homes worth more than $1 million trade hands, a 26 per cent increase.

In Alberta, Calgary saw 345 homes in its upper range, defined as over $500,000, bought and sold, a 31 per cent increase. In Edmonton, 61 houses worth more than $500,000, 62 per cent more than a year ago.

In Greater Toronto, 751 luxury homes traded hands, a 43.5 per cent increase. The most expensive was a $6.7 million home in Forest Hill.

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THE WILD, WILD WEST

The five hottest markets for upper-end homes in terms of the percentage increase in sales (Jan.-Aug. 2003 to Jan.-Aug. 2004) are all in Western Canada. Figures in brackets indicate what price level constitutes upper-end in each market.

1. White Rock/South Surrey ($800,000+): 151%

2. Victoria ($700,000+): 108%

3. West Vancouver ($1 million+): 96.5%

4. Regina ($250,000+): 72%

5. Winnipeg ($500,000+): 70%

Source: RE/MAX

© The Vancouver Sun 2004