More foreign buyers are snapping up Canada’s luxury properties, according to a new survey of Canadian real estate advisers.
Nearly one quarter of real estate advisors believe that 25 per cent or more of luxury homes in their region were purchased by foreign buyers, according to the Royal LePage Carriage Trade Luxury Properties report released Thursday.
The real estate company polled 250 real estate advisors across the country between February 26 and March 9, and nearly 66 per cent said they believe the sale of luxury properties to foreign buyers has increased in their region over the last decade.
“Over half of the advisors polled (51 per cent) cited China as the primary international region generating real estate purchases in Canada,” the report said.
“While the impact of foreign buying on Canada’s overall residential real estate market is small, we see it growing in importance in the luxury market,” said Phil Soper, president and chief executive officer, Royal LePage, in a press release.
According to the report, nearly 60 per cent of advisors expect to see an increase in purchases by people outside of Canada in 2016.
“Canada’s stable political and financial systems, along with a tradition of cultural tolerance and openness to immigration and diversity, make our country an ideal destination for wealthy international purchasers looking to invest in real property. Recently, a lower Canadian dollar has made this proposition even more attractive,” Soper said.
In British Columbia, 83 per cent of respondents said sales have increased since January and nearly three-quarters feel that sales will continue to increase over the remainder of the year.
However, in Alberta, 60 per cent of advisors said the sale of luxury properties has decreased since January 2015 and 64 per cent believe it will continue on a decline throughout the rest of the year.
“Unit sales in the luxury category have dropped slightly from last year’s level,” said John Hripko, real estate agent, Royal LePage Benchmark, in the report. “Recently however, oil prices have inched higher, giving some agents and homeowners a renewed sense of optimism, causing inquiries for luxury properties in the $1 million to $2 million range to pick up. Demand for luxury properties above that price range has been slower, but consistent with the pace seen in 2015.”
According to the report, Ontario luxury properties remain a hot item as 76 per cent of advisors said the have seen an increase in activity since last January. Almost 70 per cents said there has been an increase in foreign buyer activity in the same 10-year period.
However, in Quebec, though the luxury market “remains relatively healthy,” 58 per cent of advisors believe that less than 10 per cent of luxury properites are being purchased by foreign buyers.
“Amongst these transactions, prestigious homes remain most popular with local buyers, with a small proportion of these purchases being attributable to foreign buyers,” said Marie-Yvonne Paint, real estate professional Royal LePage Heritage, in the report. “In the luxury apartment segment, the proportion of purchases made by foreign buyers is slightly higher.”
The Royal LePage Carriage Trade Luxury Properties Report polled 250 real estate advisors, specializing in luxury properties across Canada, between February 26 and March 9, 2016. Each respondent was asked to complete a survey composed of 31 questions spanning a variety of topics including regional luxury market trends, buyer/seller demographics, foreign buyer activity and unit sales. Separate interviews were conducted with regional luxury real estate professionals to validate the survey findings and acquire additional insight on the market’s overall drivers and performance. For the survey, luxury properties are defined as those which cost no less than four times the average home price in the Greater Toronto Area, Greater Vancouver, Greater Montreal Area and Calgary markets.