Canadian Luxury Property Prices Resilient

The price of Canadian luxury property has remained strong in 2018 so far, despite sales volumes dropping in the first few months of the year.

Mortgage lending rules were tightened at the beginning of the year, designed to ensure that borrowers can afford mortgages at a time of rising interest rates. This move was coupled with tax increases for all homes over C$3 million in British Columbia, and a non-resident property tax in Ontario.

These new measures, following on from extra taxes already imposed on overseas property investors in the Toronto and Vancouver areas, could have been expected to rock the Canadian luxury property market.

However, the latest report published by real estate brokerage Royal LePage last week has shown that prices in Canadian luxury property have remained strong, despite falling sales volumes.

During the first four months of 2018, the median price for a luxury condo in the Greater Vancouver and the Greater Toronto areas rose 7 per cent and 10.4 per cent respectively year-on-year when compared to the same time last year.

Price growth for luxury condos outpaced that of luxury detached homes, which logged rises of 5.2 per cent and a fall of 0.2 per cent respectively, according to the report.

Over the same period, the median price of a luxury condo in the Greater Montreal Area and in Ottawa rose by 3.9 per cent and 4 per cent, respectively, while in Calgary condo prices fell by 6.1 per cent.

Contrary to Vancouver and Toronto, houses in these regions performed better. The Greater Montreal Area logged the largest price gain in the detached luxury home segment, increasing by 9.1 per cent to $1.56 million. In Ottawa, luxury homes rose in value by 6.3 per cent and in Calgary 0.6 per cent.

Phil Soper, president and CEO of Royal LePage, said in the report: ‘Home prices in Canada’s luxury real estate market have remained remarkably resilient when you consider the economic headwinds that serial government interventions have created. The resilience of home values reflects the strong aspirations of luxury buyers to reside and work in cities that are consistently ranked among the most desirable on the planet.’

It seems that the Canadian luxury property market is proving that whatever governments try to do, you can’t keep a good property market down.