What's happening in the High-End market these days?  Great things according to the numbers!

 Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to RE/MAX stats.

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010.  Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent).  Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end.  Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.   

“Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally.  The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.”

“The strength of the upper-end segment continues to defy expectations,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.  “That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage."

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few.  While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward.   Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels.  Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets.  This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011. 

As Canada’s millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres.  Infill, renovation and new construction are helping to some extent—while driving up prices in tandem.  The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply.  Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

This is good news for owners of high end homes in the GTA.

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