While oil prices may be dropping and warnings continue of an impending real estate bubble bursting, the $1-million dollar plus luxury real estate market in Canada continues to be hot. Winter sales tend to be less busy than spring and summer, but listings of homes in the one million plus price range are starting to come to the market in droves. Get out your checkbook; it is a buyers’ market right now.
Sales are rising and so are house prices. Toronto in particular is seeing this trend in the local housing market. Some homes have more than doubled in price in just ten years.
Most buyers have to stretch their budget to afford a $1-million property, which is the average price in Vancouver, and almost there at $965,000 in Toronto. Even then, the $1-million homes are often not as spectacular as the price tag – small lots, older homes, and not as recent upgrades. Once the buyer finds homes in the $1.5 million dollar price range – if they can even afford that price point – the lots get larger, locations get better, and home upgrades are typically current and on trend.
Many buyers look to get into the $1-million market to eventually step up into the multi-million dollar tier, the homes in the $2-million plus range. Getting your foot in the door costs a whole lot more these days. Regrettably, as home prices increase salaries typically do not. Many $1-million plus homes may linger on the market as the availability of buyers that can afford the price dwindles down.
It is not just the $1-million real estate market that is hot right now. It is obvious the luxury market is on fire when looking into the next price tier. According to reports from Sotheby’s, sales of residences in the $2-million to $4-million range rose by forty percent in Toronto in 2014. Montreal saw an astonishing fifty percent rise in sales in this tier in that same year. The $1-million plus price tag is just the tip of the iceberg when it comes to the luxury home market throughout Canada.
So what drives the $1-million plus sales? Buyers who are frantic to get into the market before prices continue to shoot upward are partly responsible for the drive in sales. As long as there is less inventory than there are buyers, the prices will also continue to rise and push more homes over the $1-million mark.
Even luxury condominiums are creeping close to the $1-million mark, edging out families that were choosing to live an urban lifestyle with a smaller housing price tag. Finding the dream home has become more of a nightmare for many younger buyers.
Regardless, the million-dollar market continues strong in many sectors of Canada. With low inventory, multiple offers, and prices pushed higher, this tier of real estate is not going away or diminishing anytime soon. The only thing that is likely to cool the market at this point is a rise in the historically low interest rates.
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