Country’s rich­est res­i­dents – as well as mil­lion­aires from China and United King­dom – turn­ing to prop­erty to pro­vide safe haven for their money

Steve Ladu­ran­taye – Globe and Mail

As the real-estate mar­ket in Canada con­tin­ues its record-setting recov­ery, the mar­ket for high-end homes is surging.

The country’s rich­est res­i­dents – as well as mil­lion­aires from coun­tries such as China and the United King­dom – are turn­ing to prop­erty to pro­vide a safe haven for their money because the mar­ket is seen as a sta­ble place to park cash as the global econ­omy recov­ers from a deep recession.

Attribut­ing the upswing in sales to “improved eco­nomic per­for­mance, increased per­sonal wealth, immi­gra­tion and for­eign invest­ment,” ReMax Canada said in a report Mon­day that sales for so-called lux­ury homes broke records in nine of the 13 regions exam­ined in the first quar­ter of the year.

“It’s an astound­ing recov­ery com­pared to last year when peo­ple just slammed on the brakes,” said Michael Pol­zler, exec­u­tive vice-president and regional direc­tor of ReMax for Ontario and Atlantic Canada.

The brokerage’s def­i­n­i­tion of a lux­ury home varies by mar­ket, from $400,000 in St. John’s to $2-million in Greater Van­cou­ver. The amount is usu­ally deter­mined by look­ing at the top 1-to-5 per cent of sales in any given market.

While there are no sta­tis­tics avail­able to con­firm the pres­ence of high-end buy­ers from out of the coun­try, anec­do­tal evi­dence from real estate bro­ker­ages across the coun­try is abun­dant. Cen­tury 21 recently launched a Chi­nese ver­sion of its web­site to help Asian buy­ers find Cana­dian res­i­den­tial prop­er­ties and Real​tor​.ca – the hub for list­ings on the Cana­dian Real Estate Association’s Mul­ti­ple List­ing Ser­vice – now gets almost 1 per cent of its traf­fic from China.

“There is no doubt a great deal of the demand is com­ing from main­land China,” said Ross McCredie, pres­i­dent of Sotheby’s Inter­na­tional Realty Canada, who has also been field­ing calls from prospec­tive buy­ers in the Euro­pean Union and Mex­ico. “The Chi­nese are the peo­ple shop­ping at above $5-million.”

Canada’s mar­ket has rebounded strongly from the reces­sion, with aver­age sale prices up almost 20 per cent. But on a global scale, prices here are still rel­a­tively low – espe­cially for high-end prop­er­ties, which real­tors said are sell­ing for about the same price as they were in 2007.

And while Canada’s rapid recov­ery – it posted a 5.2 per cent year-over-year gain in 2009 – stoked fears of a hous­ing bub­ble even as unem­ploy­ment climbed higher, other mar­kets have been far frothier.

Over the same time period, a sur­vey by Knight Frank LLP found prices in Hong Kong gained 27.6 per cent, fol­lowed by China at 25.1 per cent, Israel at 21.3 per cent, and Aus­tralia at 13.6 per cent.

Canada was 12^th on the list, just behind South Africa and a smidge ahead of Austria.

That has drawn inter­na­tional atten­tion to homes such as the Mon­treal man­sion being sold by real estate agent Cyrille Girard. The house has seven bed­rooms, five bath­rooms and a heated indoor pool. It also fea­tures some­thing its owner didn’t have last year – inter­est from buy­ers will­ing to pay the $27-million ask­ing price.

Mr. Girard – an agent with Sotheby’s Inter­na­tional Realty Que­bec – only listed the 41,000-square-foot house Mon­day. Two inter­ested buy­ers have already booked appoint­ments to tour the lake­front prop­erty, and he con­sid­ers them real leads to buy what is cur­rently Canada’s prici­est listing.

“One is fly­ing in from out of the coun­try, though I don’t want to say where because these things can be del­i­cate,” he said. “There is a great deal of inter­est because prices in Canada are seen as rea­son­able com­pared to other places in the world.”

But while buy­ers have returned from their self-imposed exile, the boom in lux­ury hous­ing has taken on a dif­fer­ent tone than the broader mar­ket because buy­ers are will­ing to take time to explore their options, since there are plenty of list­ings and rel­a­tively few would-be owners.

Phil Soper, chief exec­u­tive offi­cer of Brook­field Real Estate Ser­vices, said there’s also no rush to buy because the homes are no longer looked at for their invest­ment value.

“Those buy­ing these homes are typ­i­cally finan­cially sophis­ti­cated and there aren’t too many who will believe we’re in for sev­eral years of highly appre­ci­at­ing val­ues,” he said. “They see today’s prices as rea­son­able, and don’t really think prices will fall very much.”

————————————————————————————————————–

Con­tact the Jef­frey Team for more infor­ma­tion  -  416−388−1960

————————————————————————————————————–